Healthcare Fraud Lawyer Blog

October 20, 2017

California Workers’ Comp Suspends 11 Medical Providers in October

hush-naidoo-382152-copy-300x200 The California Division of Workers’ Compensation (DWC) announced new suspensions twice in October. It suspended eight medical providers from participating in the state’s workers’ compensation system in early October and then three more shortly after. The total suspensions for 2017 are now up to 49.

These suspensions are part of the DWC’s new policy passed into law in 2016 by Assembly Bill 1244. The new law, which went into effect on January 1, requires the DWC to suspend any medical provider that is convicted of any offense involving abuse or fraud of the federal Medicare program, the state Medi-Cal program, any workers’ compensation system, or a patient. Medical providers can also be suspended for other types of misconduct that led to their license being revoked or surrendered.

The Suspended Medical Providers

October 13, 2017

California Judge Dismisses FCA Case Against UnitedHealth Group

by Gregory J. Brod

samuel-zeller-360588-copy-200x300 In early October, a California federal judge dismissed without prejudice a False Claims Act (FCA) lawsuit against UnitedHealth Group Inc. (UHG). The suit, U.S. ex rel. Swoben v. Secure Horizons, et al., alleged UHG ignored questionable diagnoses that led to higher reimbursements through the Medicare Advantage program. This is significant news for the U.S. Department of Justice (DOJ). The UHG case was the first FCA suit related to the Medicare Advantage program that the DOJ joined. This was essentially a test case to determine the strength of the DOJ’s position and the ability to bring similar cases in the future. Unfortunately, this dismissal signals there were numerous weaknesses in the DOJ’s FCA case.

The Basis for the FCA Claim

This qui tam suit was brought by a whistleblower who alleged UHG knowingly ignored questionable patient charts reviewed by another company, Healthcare Partners LLC. These charts, whether or not they had appropriate evidence, contained diagnoses that would increase the insurer’s risk adjusted payments under the Medicare Advantage program. Under Medicare Advantage, healthcare providers receive higher reimbursements for caring for sicker patients.

October 6, 2017

Drug Maker Aegerion to Pay $35 Million Settlement

by Gregory J. Brod

andres-de-armas-103880-copy-300x200 On Sept. 22, the U.S. Department of Justice announced that drug manufacturer, Aegerion Pharmaceuticals Inc., a subsidiary of Novelion Therapeutics Inc., has agreed to plead guilty to criminal charges and pay a multi-million settlement of to resolve allegations of civil false claims.

The Criminal Charges

The criminal charges against Aegerion state that the manufacturer introduced the prescription drug, Juxtapid, into interstate commerce when it was misbranded under the Federal Food, Drug, and Cosmetic Act (FDCA). Juxtapid was approved by the U.S. Food and Drug Administration (FDA) to treat patients suffering from a rare disorder, homozygous familial hypercholesterolemia (HoFH). This condition prevents the body from removing LDL-C, the “bad” cholesterol, from the blood and causes high levels of LDL-C in the body. The drug carried a black box warning for potential liver toxicity and gastrointestinal side effects.

September 29, 2017

The DOJ Prosecutes All Levels of Healthcare Fraud

by Gregory J. Brod

vladimir-kudinov-71455-copy-300x241 There is a misconception that the U.S. Department of Justice (DOJ) is mainly interested in health care fraud and violations of the False Claim Act (FCA) from large corporations like major insurers or pharmaceutical manufacturers. However, this is not true. The DOJ is on a mission to uncover health care fraud at all levels of care, including with individual physicians, local hospitals, regional insurers, and multi-national businesses. This is evidence by two recent DOJ announcements regarding settlements with a family practice chain in South Carolina and a hospital operator in New York.

South Carolina Family Medicine Centers

The Family Medicine Centers of South Carolina LLC (FMC) agreed to pay the U.S. $1.56 million to resolve allegations of FCA violations. FMC is a physician-owned chain of five, previously six, medical practices located in Columbia, South Carolina, and the surrounding area. FMC’s principal owner and chief executive officer Dr. Stephen F. Serbin and FMC’s former laboratory director Victoria Serbin will pay $443,000 to personally resolve allegations of FCA violations.

September 22, 2017

DOJ Continues to Fight Opioid Epidemic

by Gregory J. Brod

alex-vasey-225127-copy-300x200 In early September, the U.S. Department of Justice announced that Galena (Galena) Biopharma Inc. will pay more than $7.55 million in a False Claims Act (FCA) settlement. The U.S. alleges that Galena paid various types of kickbacks to encourage physicians to prescribe Abstral, which is a fentanyl-based drug, also known as an opioid.

This settlement, along with the DOJ announcement regarding the expansion of opioid awareness training programs on Native American land, demonstrate that the DOJ and other government agencies are continuing to fight the opioid crisis on multiple fronts.

Galena’s FCA Settlement

September 15, 2017

Novo Nordisk to Pay $58 Million Settlement

by Gregory J. Brod

andres-de-armas-103880-copy-300x200 In early September, the U.S. Department of Justice (DOJ) announced pharmaceutical manufacturer Novo Nordisk Inc. has agreed to pay $58.65 million for failing to comply with a Food and Drug Administration (FDA) mandated Risk Evaluation and Mitigation Strategy (REMS) program. The REMS was for Novo Nordisk’s Type II diabetes medication Victoza, which created a risk of a rare form of cancer in humans known as Medullary Thyroid Carcinoma. Novo Nordisk was required to take steps to mitigate this potential risk, including providing information about MTC to physicians. By failing to mitigate the risk as prescribed in the REMS, the FDA determines the drug is misbranded under the law.

Novo Nordisk’s Alleged Misconduct

The DOJ claimed in a complaint that Novo Nordisk violated the Federal Food, Drug, and Cosmetic Act (FDCA) between 2010 and 2014 and violated the False Claims Act (FCA) between 2010 and 2014. According to the complaint, Novo Nordisk sales representatives gave physicians the false or misleading impressions regarding the Victoza REMS was not important. The representatives framed the information in such a way as to make the warning appear irrelevant.

September 8, 2017

CHRISTUS Health Care Companies to Pay $12.24 Million in FCA Settlement

by Gregory J. Brod

daan-stevens-282446-copy-300x191 CHRISTUS St. Vincent Regional Medical Center, located in Santa Fe, New Mexico, and CHRISTUS Health, located in Irving, Texas, have agreed with the U.S. Department of Justice to resolve allegations of violating the federal False Claims Act (FCA) with a settlement of $12.24 million plus interest.

A Qui Tam Suit

The allegations against the CHRISTUS health care companies were made by a former indigent healthcare administrator under the qui tam provision of the FCA. This whistleblower provided information that the two health care companies were making illegal donations to county governments. Between 2001 and 2009, the CHRISTUS companies allegedly made donations in bad faith to various counties, which in turn caused New Mexico to present false claims to the federal government through the Medicaid program.

September 1, 2017

Whistleblower Fails to Get a New Judge in Case

by Gregory J. Brod

christina-sicoli-19892-copy-300x212 Whistleblower George Gage has made it clear he is not happy with the current judge for his qui tam case, U.S. District Judge Sam Sparks. Gage claims that throughout his False Claims Act (FCA) case against Rolls-Royce North America Inc., Judge Sparks has handed down orders that attempt to divest him of jurisdiction in order to try and have Gage’s case thrown out before Rolls-Royce submitted an answer. He has tried two different ways to obtain a different judge on his case and each time has failed. That is because it takes a great deal of evidence of bias or impartiality to get a judge taken off a case.

If you are currently part of a qui tam case and believe the judge is not able to be partial, contact the experienced California qui tam attorneys of Brod Law Firm as soon as possible.

Gage’s Attempts for a New Judge

August 25, 2017

Owner of Texas Home Health Agencies Sentenced to Prison for Conspiracy to Defraud Medicare

by Gregory J. Brod

daan-stevens-282446-copy-300x191 The U.S. Department of Justice (DOJ) announced August 18 that the owner and operator of five home health agencies located in the Houston area, Godwin Oriakhi, 61, was sentenced to 480 months in prison for conspiring to defraud Medicare and the Texas’ Medicaid programs: Home and Community-Based Service (HCBS) and Primary Home Care (PHC), which are known as provider attendant services (PAS). The authorities found Oriakhi defrauded Medicare and the Medicaid programs for more than $17 million, making this the largest PAS fraud case in all of Texas’ history.

More on Oriakhi’s Fraud

Oriakhi pleaded guilty to two counts of conspiracy to commit health fraud and one count of conspiracy to launder monetary instruments in March 2017. This came after Oriakhi admitted that he and his daughter, a co-defendant in the case, and other members of his family obtained patients for his home health agencies through illegal kickbacks to patient recruiters, his office employees, and physicians. His five facilities receive hundreds of patient referrals this way.

August 20, 2017

Mylan Agrees to Settle FCA Lawsuit Regarding EpiPen

by Gregory J. Brod

lukasz-szmigiel-413-copy-300x169 Pharmaceutical companies Mylan Inc. and Mylan Specialty L.P. agree to pay $465 million to settle a lawsuit brought under the False Claims Act (FCA). According to the FCA-based suit brought by a whistleblower, Mylan intentionally misclassified EpiPen as a generic drug – knowing it was a brand name drug – in order to not have to pay higher rebates to Medicaid. EpiPen is a brand name drug because there is no therapeutically equivalent drug provided by other manufacturers. Mylan is the single source of EpiPen. By willfully and incorrectly deeming it a generic drug, Mylan was not required by law to pay a higher rebate to Medicaid, thereby retaining a greater amount of money and increasing their profits.

More on Mylan’s Actions

The purpose of the Medicaid Drug Rebate Program is to ensure state Medicaid programs were not injured to price gouging by manufacturers that were the only source of a drug, like EpiPen. When a drug manufacturer is a single course for a medication, there is no market competition to balance the price of the drug. Instead, that manufacturer can continually raise the price and there will always be a demand for the drug out of necessity.