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January 15, 2020

ResMed Corp. has agreed to pay $37.5 million to resolve five whistleblower-brought lawsuits alleging that the durable medical equipment (DME) manufacturer paid illegal kickbacks to suppliers, sleep labs, and other health providers, in violation of the Anti-Kickback Statute and False Claims Act.  $6.2 million of the settlement will be split amongst the whistleblowers, who had revealed that ResMed improperly provided or helped provide free or below cost call center services, patient outreach services, medical equipment and installation, and interest-free loans, in exchange for business.  DOJ; USAO EDNY; USAO NDIA; USAO SC; USAO SDCA

January 15, 2020

TMJ & Orofacial Pain Treatment Centers of Wisconsin has agreed to pay $1 million to settle a qui tam suit alleging submissions of false claims to Medicare and TRICARE.  According to the anonymous whistleblower, who will receive an undisclosed share of the settlement, TMJ billed the government health programs for prosthetic devices as if they had been fabricated by in-house surgeons, when in fact they had been fabricated by an outside laboratory.  USAO EDWI

January 10, 2020

The owner of two Philadelphia-based testing laboratories has pleaded guilty and agreed to pay more than $77 million in restitution for participating in an illegal kickback scheme.  At his plea hearing, Ravitej Reddy admitted that his laboratories, Personalized Genetics, LLC and Med Health Services Management, LP, participated in a fraudulent scheme that took advantage of the labs' location in a high reimbursement area for Medicare cancer and pharmacogenetic testing the labs actually sent for testing to a laboratory that was located outside of the lucrative coverage area, because the labs lacked equipment to perform the tests themselves.  To secure the lab orders, Reddy admitted paying kickbacks to co-conspirators, including marketers that solicited specimens from Medicare beneficiaries, and a telemedicine practice that improperly authorized the tests without regard to medical necessity.  In addition to the restitution order, Reddy faces a maximum of 25 years in prison at his sentencing in February.  USAO WDPA

December 30, 2019

A defense contractor accused of submitting false claims on a contract with the U.S. Army has agreed to pay $3 million to resolve its liability.  Kansas-based LaForge & Budd Construction Company, Inc., had been tasked with raising the elevation of a dam at the Fort Sill Army Post in Oklahoma.  Although the contract specified that satisfactory fill be used, LaForge defied this by using materials such as pieces of concrete, rebar, and rubble, and then represented to the Army that it had fully complied with the contract's terms and conditions.  USAO WDOK

December 30, 2019

Medsurant Holdings, LLC, the nation's largest independent provider of Interoperative Neuromonitoring (IONM) services, has agreed to pay $1.9 million to settle allegations of defrauding Medicare.  According to the DOJ, from 2013 to 2016, Medsurant billed Medicare for IONM services—used to monitor patients’ nervous systems during high-risk surgeries—that were not provided exclusively to one patient or were concurrently provided to patients insured by private payors, in violation of Medicare rules as well as the False Claims Act.  USAO MDTN

Sharp HealthCare — Medicare Fraud/Kickbacks (undisclosed settlement amount)

Three of our whistleblower attorneys represented a whistleblower in a qui tam action under the False Claims Act against Sharp HealthCare, a regional hospital system in San Diego.  Our client alleged that the Sharp Healthcare Center for Research, Sharp’s clinical-trial research arm, fraudulently billed government payers in violation of “secondary payer” rules that prohibit billing the government when other payers will pay for a patient’s care. Our whistleblower client also alleged that Sharp cultivated an illegal kickback scheme to entice prospective trial sponsors to host clinical trials at Sharp by regularly undervaluing Sharp’s costs involved in managing clinical trials.  By offering below-market value incentives and billing government and commercial insurers for injuries, the lawsuit alleged that Sharp sought to increase its attractiveness to trial sponsors. Sharp’s alleged purpose was to burnish the organization’s reputation and offer a lucrative stream of income for Sharp-affiliated physicians involved in clinical trials. Sharp settled the whistleblower’s case for an undisclosed amount.  Read more here.

December 5, 2019

Maryland-based internist Noman Thanwy, M.D. has paid over $176,000 to settle allegations of submitting false claims to Medicare for medically unnecessary autonomic nervous function and vestibular function tests.  Although the tests are typically performed only once per beneficiary to confirm diagnoses of relatively uncommon disorders, Dr. Thanwy, who lacked the necessary training and equipment to perform the tests, was allegedly using them to monitor patient symptoms.  USAO MD

December 3, 2019

In the second settlement to come out of a federal investigation into the generic pharmaceutical industry, Rising Pharmaceuticals Inc. has agreed to pay over $4 million to settle civil and criminal charges stemming from violations of the False Claims Act and Anti-Kickback Statute.  In the criminal case, Rising allegedly teamed up with a competing generic drug manufacturer to fix prices and divide up the market for a hypertension drug, Benazepril HCTZ, while in the civil case, the company allegedly paid and received illegal remuneration through similar arrangements with another generic drug manufacturer.  Under the newly signed deferred prosecution agreement, Rising has agreed to cooperate fully with the ongoing investigation.  DOJ; USAO EDPA

Government Audit of Chronic Care Management Services Raises Serious Questions About Proposed Anti-Kickback Statute Safe Harbors

Posted  11/22/19
stethoscope on top of money and coins
The U.S. Department of Health and Human Services is engaged in what it calls a “Regulatory Sprint to Coordinated Care,” in order to, in the words of HHS Deputy Secretary Eric Hargan, “update, reform, and cut back our regulations to allow innovation toward a more affordable, higher quality, value-based healthcare system.”  On October 9, 2019, as part of this effort to “cut back” on regulations to advance...

November 20, 2019

Louisville, Kentucky hospital Jewish Hospital & St. Mary’s Healthcare Inc. has agreed to pay $10.1 million to resolve allegations that the hospital, doing business as Pharmacy Plus and Pharmacy Plus Specialty, submitted false claims to Medicare for prescription drugs that did not have the required physician order or proof of delivery, for prescription refills that were not reasonable and necessary, or for prescriptions that otherwise did not meet Medicare coverage requirements.  In addition, defendant was alleged to have violated the Anti-Kickback Statute by providing unlawful remuneration to patients in the form of free blood glucose testing supplies and waiver of co-payments and deductibles for insulin.  The case was initiated by a qui tam complaint filed by pharmacist Robert Stone, who will receive $1.85 million from the settlement.  DOJ
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