Whistleblower Rewards

February 4, 2021

Durable medical equipment company Regency, Inc., has agreed to a $20.3 million civil settlement to resolve allegations that, together with its principal Kelly Wolfe, it violated the False Claims Act by creating dozens of front companies to submit over $400 million in false claims to government healthcare programs for the sale of DME that was not medically necessary.  Defendants were alleged to have paid unlawful kickbacks to doctors and falsely claimed that those doctors provided telehealth services to the beneficiaries, when in most cases the doctors had no interaction at all with the beneficiaries.  Wolfe also pleaded guilty to conspiracy to commit healthcare fraud and will be sentenced at a later date.  Former Regency employee Condra Albright will receive 23% of the civil recovery as a whistleblower reward.  DOJ; USAO MD FL

January 28, 2021

Electronic health records vendor athenahealth Inc. will pay $18.25 million to resolve claims brought in two separate whistleblower actions alleging that certain Athena marketing programs provided unlawful remuneration to healthcare providers and others to induce providers to purchase Athena’s EHR systems.  Remuneration to current and prospective customers included all-expenses paid trips to sporting, entertainment, and recreational events, as well as cash payments to customers who referred others to Athena.  In addition, Athena paid other EHR vendors who referred clients to Athena when they were discontinuing their own EHR products and services. The kickbacks allegedly improperly generated sales for Athena while causing healthcare providers to submit false claims to the federal government for incentive payments related to the adoption and “meaningful use” of Athena’s EHR technology. The whistleblowers, Geordie Sanborn, Cheryl Lovell, and William McKusick, will receive a share of the total settlement that remains to be determined.  DOJ; USAO Mass

January 22, 2021

The estate of Dr. Patrick T. Hunter has agreed to pay more than $1.7 million to resolve allegations that the urologist, who passed away in 2019, submitted false claims to Medicare and TRICARE for medically unnecessary procedures and received improper payments for them from the Orlando Center for Outpatient Surgery.  Between 2010 and 2016, Dr. Hunter allegedly performed the lithotripsy procedures, which break up kidney stones, on patients who either did not have kidney stones or were not medically indicated for them.  For initiating the successful qui tam suit, whistleblower Scott Thompson will receive a relator’s share of $385,000.  USAO MDFL

January 14, 2021

The SEC has awarded nearly $600,000 to an anonymous whistleblower whose information and substantial assistance resulted in critical investigative leads in an open investigation, ultimately leading to a successful enforcement action.  SEC

January 12, 2021

Boeing-owned drone maker Insitu Inc. has agreed to pay $25 million to resolve a whistleblower-brought suit alleging violations of the False Claims Act.  According to D.R. O’Hara, a former executive at Insitu, the company knowingly submitted cost and pricing data for new parts, but used recycled parts to build drones being supplied to the U.S. Navy and U.S. Special Operations Command on seven contracts.  The alleged misconduct ran from 2009 to 2017.  For exposing the fraudulent scheme, Mr. O’Hara will receive $4.6 million of the settlement proceeds.  USAO WDWA

January 7, 2021

The SEC has awarded five whistleblowers more than $1.1 million for providing information that led to three successful enforcement actions.  The first order credited three whistleblowers with information and assistance that led to two related enforcement actions; the three were awarded nearly $500,000.  The second order awarded nearly $600,000 to an individual who reported concerns internally before providing extensive assistance to SEC investigators.  The third order awarded over $100,000 to an individual who provided independent analysis of publicly available documents; this is the fifth such whistleblower this fiscal year who has granted an award.  SEC