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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

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

November 8, 2019

Lenox Hill Hospital and its corporate parent, Northwell Health, Inc., have agreed to pay $12.3 million for violating the Stark Law and False Claims Act in submissions to Medicare.  From 2013 to 2018, Lenox Hill paid the chair of its urology department, Dr. David Samadi, a salary and bonus that improperly took into account the value of his referrals and grossly exceeded fair market value.  In an effort to maximize revenue-generating surgeries, Samadi was repeatedly scheduled to perform overlapping surgeries, leaving patients with unsupervised medical residents in violation of both hospital and Medicare rules.  The department also billed Medicare for minor procedures performed in operating rooms with an unnecessarily full operating room staff.  USAO SDNY

November 8, 2019

In the eleventh settlement involving the multi-state OK Compounding Pharmacy fraud scheme, podiatrist Jonathan Moore of Kentucky has agreed to pay $65,404 for the role he played in defrauding federal healthcare programs.  In exchange for illegal kickbacks disguised as “medical director fees,” Dr. Moore allegedly prescribed medically unnecessary compounded pain creams to patients, many of whom were insured by Medicare and TRICARE.  USAO NDOK

November 7, 2019

Medical device manufacturer Life Spine Inc. has agreed to pay $5.5 million to settle fraud allegations stemming from a qui tam suit, with founder and CEO Michael Butler agreeing pay another $375,000, and VP of business development Richard Greiber agreeing to pay another $115,000.  As part of the settlement, the defendants admitted to paying kickbacks to surgeons and entities between 2012 and 2018 in exchange for their use of Life Spine’s spinal implants, devices, and equipment.  USAO SDNY
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