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Whistleblower Rewards

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Page 88 of 102

January 12, 2016

Connecticut-based J&L Medical Services agreed to pay $600,000 to resolve allegations it violated the federal and state False Claims Acts.  J&L Medical is a durable medical equipment company that provides Continuous Positive Airway Pressure (CPAP) and Bilevel Positive Airway Pressure (BiPAP) devices and accessories to Medicare and Medicaid beneficiaries who have been diagnosed with obstructive sleep apnea.  According to the government, the company regularly used the services of unlicensed technicians to provide respiratory therapy services to Medicare and Medicaid beneficiaries, including setting up CPAP and BiPAP machines, fitting the patients with the masks used with those machines, and educating the patients about the use of the machines.  The allegations originated in a whistleblower lawsuit filed by John Hart, a former employee of J&L Medical and a licensed respiratory therapist, under the qui tam provisions of the False Claims Act.  He will receive a whistleblower award of $102,000 from the proceeds of the government’s recovery.  DOJ (CT)

January 8, 2016

Dr. David G. Bostwick, owner of Virginia-based pathology lab Bostwick Laboratories Inc., agreed to pay up to $3.75 million to resolve charges of violating the False Claims Act for billing Medicare and Medicaid for medically unnecessary cancer detection tests and offering incentives to physicians to obtain Medicare and Medicaid business.  Specifically, Dr. Bostwick allegedly directed Bostwick Laboratories to bill Medicare and Medicaid for expensive cancer detection tests known as Fluorescent In Situ Hybridization (FISH) tests, as well as other tests, that were not medically necessary and were performed without the treating physicians’ consent or order.  FISH tests are used to detect bladder cancer.  Bostwick also allegedly offered various discounts and billing arrangements to treating physicians to induce them to refer business in violation of the Anti-Kickback Statute.  On Aug. 28, 2014, Bostwick Laboratories previously agreed to pay over $6.5 million to resolve the allegations in this lawsuit.  The allegations were originally raised in a whistleblower lawsuit brought by Michael Daugherty, who works in the industry, under the qui tam provisions of the False Claims Act.  Daugherty will receive a whistleblower award of over $2.5 million from the government’s settlements.  DOJ

January 5, 2016

Wisconsin-based Novum Structures LLC agreed to enter a guilty plea and pay $3 million to resolve its criminal and civil liability arising from its improper use of foreign materials in federally funded construction projects which had “Buy America” requirements.  Novum specializes in the design and construction of glass space frames often used in roofs and atrium enclosures.  The allegations originated in a whistleblower lawsuit filed by Brenda King under the qui tam provisions of the False Claims Act.  She will receive a whistleblower award of approximately $400,000 from the government’s recovery.  DOJ

January 5, 2016

Nashville Pharmacy Services, LLC, and its majority owner Kevin Hartman, agreed to pay up to $7.8 million to settle charges they violated the False Claims Act by overbilling Medicare and TennCare for pharmacy services.  Specifically, the government claimed the Nashville-based pharmacy that specializes in dispensing HIV and AIDS-related medications automatically refilled medications without a request from the beneficiary or their physician; improperly waived TennCare and Medicare co-payments without an individualized assessment of ability to pay; improperly used pharmaceutical manufacturers’ co-payment cards to pay the co-payments of Medicare beneficiaries; billed for medications dispensed after the deaths of certain beneficiaries; and billed for medications that lacked a valid prescription.  The allegations originated in a whistleblower lawsuit filed by Marsha McCullough, a former Nashville Pharmacy order entry technician, under the qui tamprovisions of the False Claims Act.  She will receive a whistleblower award of 18 percent of the government’s recovery which could amount to $1.4 million.  Whistleblower Insider

December 23, 2015

Memorial Health, Inc., Memorial Health University Medical Center, Inc., Provident Health Services, Inc., and MPPG, Inc. (d/b/a Memorial Health University Physicians) agreed to pay roughly $10 million to settle charges they violated the False Claims Act by submitting claims to the Government in violation of the Stark Law which prohibits hospitals from entering into improper financial relationships with referring physicians.  The settlement is the largest civil health care fraud recovery in the history of the United States Attorney’s Office for the Southern District of Georgia.  The allegations first arose in a whistleblower lawsuit filed by former Memorial Health CEO Phillip Schaengold under the qui tam provisions of the False Claims Act.  The whistleblower will receive a yet-to-be-disclosed whistleblower reward from the proceeds of the government’s recovery. DOJ (SDGA)

December 22, 2015

Coloplast Corp., a manufacturer of ostomy and continence care products, and Liberator Medical Supply, Inc., a medical products supplier, agreed to pay $3,160,000 and $500,000, respectively, to resolve allegations that Coloplast paid unlawful kickbacks to several medical suppliers, including Liberator, to induce them to conduct promotional campaigns designed to refer individual users to Coloplast products.  In addition to Liberator, the government alleged Coloplast also paid kickbacks to Byram Healthcare Centers, Inc.; CCS Medical, Inc.; Liberty Medical, Inc.; and Handi Medical, Inc. in return for marketing promotions and conversion campaigns.  The government alleged that in the case of Byram, Liberty, and Handi, Coloplast’s promotional campaigns allegedly included kickbacks in the form of funding for cash incentives – sometimes known as “spiffs” – paid to the suppliers’ sales personnel to induce them to refer patients to Coloplast products.  In other instances, Coloplast allegedly gave rebates or price concessions as inducements for the promotional campaigns.  The allegations first arose in a whistleblower lawsuit filed by two former employees and one current employee of Coloplast under the qui tam provisions of the False Claims Act.  They will receive a yet-to-be-determined whistleblower award from the proceeds of the government’s recovery. DOJ (DMA)

December 21, 2015

Texas-based University Furnishings LP and its general partner, Freedom Furniture Group Inc., agreed to pay $15 million to settle charges they violated the False Claims Act by making false statements to avoid paying duties on wooden bedroom furniture imported from China.  According to the government, between 2009 and mid-2012, University Furnishings misclassified wooden bedroom furniture on documents presented to U.S. Customs and Border Protection (CBP) to avoid paying antidumping duties on imports of wooden bedroom furniture manufactured in China.  The companies allegedly classified the furniture as office and other types of furniture not subject to duties while selling the furniture in the student housing market for use in dormitory bedrooms.  The allegations originated in a whistleblower lawsuit brought by University Loft Company under the qui tam provisions of the False Claims Act.  University Loft will receive a whistleblower award of $2.25 million from the proceeds of the government’s recovery. DOJ

December 18, 2015

21st Century Oncology, a Florida-based provider of integrated cancer care services, agreed to pay $19.75 million to resolve allegations it violated the False Claims Act by billing federal health care programs for laboratory tests that were not medically necessary.  The tests involved were fluorescence in situ hybridization (or “FISH”) tests which are laboratory tests performed on urine that can detect genetic abnormalities associated with bladder cancer.  The government alleged that 21st Century submitted claims for unnecessary FISH tests that were ordered by four of its urologists, Dr. Meir Daller, Dr. Steven Paletsky, Dr. David Spellberg and Dr. Robert Scappa.  The government further alleged the company encouraged these physicians to order unnecessary FISH tests by offering bonuses that were based in part on the number of tests referred to 21st Century’s laboratory.  The allegations first arose in a whistleblower lawsuit filed by a former 21st Century medical assistant under the qui tam provisions of the False Claims Act.  The whistleblower will receive a whistleblower award of $3.2 million from the proceeds of the government’s recovery.  DOJ

December 18, 2015

Maryland-based splint supplier Dynasplint Systems Inc., and its founder and president, George Hepburn, agreed to pay roughly $10.3 million to resolve allegations they violated the False Claims Act by improperly billing Medicare for splints provided to patients in skilled nursing facilities.  According to the government, to circumvent Medicare rules which provide for bundled payment to these facilities that cover all of a patient’s needs, Hepburn and Dynasplint mispresented that patients were in their homes or other places that were not skilled nursing facilities.  The allegations first arose in a whistleblower lawsuit filed by former Dynasplint sales executive Meredith Deane under the qui tam provisions of the False Claims Act.  Ms. Deane will receive a whistleblower award of roughly $2 million from the proceeds of the government’s recovery.  DOJ

December 16, 2015

Qualitest Pharmaceuticals, the company’s corporate shell, Vintage Pharmaceuticals, its parent Endo Pharmaceuticals, and seven of their affiliates, agreed to pay $39 million to 48 states and the federal government to settle charges they violated federal and state False Claims Acts by selling understrength chewable fluoride tablets.  As part of the settlement, Qualitest admitted the drug labeling for its chewable fluoride tablets represented fluoride amounts in line with guidelines of the American Dental Association and the American Academy of Pediatrics when in reality it used less than half of these represented amounts.  The allegations were first raised in a whistleblower lawsuit brought Dr. Stephan Porter under the qui tam provisions of the False Claims Act.  He will receive a whistleblower award of roughly $4.71 million from the proceeds of the government’s recovery.  Whistleblower Insider, NY, NH
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