Healthcare Fraud Lawyer Blog

August 22, 2016

Government Fraud Whistleblowers’ Law Firm Examines the Continuing Commitment to Fighting Fraud

It is no secret that, as a whistleblower’s law firm, we are big fans of the False Claims Act (“FCA” or “the Act”). The Act holds liable any person/entity that presents a false or fraudulent claim for payment to the federal government (or an agency thereof) and/or create false records to that end. In essence, it forbids overcharging the government for goods or services or charging for goods/services that are never delivered. The Act’s qui tam provision is particularly powerful since it enables private individuals to bring suits on the government’s behalf. This is key because it is often private parties, rather than the government itself, who are aware of these fraudulent schemes. Recent trends show that the legislature and the courts are committed to working with whistleblowers and, more generally, to using the False Claims Act as a powerful tool to battle health care fraud and other forms of fraud on the U.S. government.

DOJ Nearly Doubles Per Claim False Claims Act Penalties

As Becker’s Hospital Review, a healthcare industry journal, reported last month, the Department of Justice (“DOJ”) recently published an interim final rule substantially increasing the monetary penalty for violations of the FCA. Previously, penalties ranged from $5,500 to $11,000 per claim. The new penalties nearly double the old ones and range from $10,781 to $21,563. These increased penalties took effect on August 1 and only apply to violations occurring after November 2, 2015. The increase was made pursuant to the Bipartisan Budget Act of 2015 which required agencies to increase FCA penalties and authorized rulemaking to implement a “catch up adjustment” to account for inflation. The DOJ is just one of the agencies updating penalties (the Railroad Retirement Board was the first), but it is certainly among the most impactful.

August 15, 2016

Lessons from a False Claims Act Ruling on Medicare Pricing and the “Usual and Customary” Price

by Gregory J. Brod

We pride ourselves on our work helping whistleblowers bring claims pursuant to the False Claims Act. As a False Claims Act law firm, we have specialized knowledge of this complex piece of legislation that empowers individuals to bring fraud claims on behalf of the government. A ruling from a federal district court released in late Spring in a case alleging Medicare fraud looks at one of the many important details that come up in these cases. More specifically, the case looks at what constitutes a “usual and customary” price for purposes of determining whether a provider is complying with the law and offering Medicare beneficiaries an appropriate price on prescription drugs. In doing so, the court highlights one important requirement that is often subverted by perpetrators of fraud and also provides a reminder of how complex False Claims Act cases can be.

Background on the Garbe Case

On May 27, 2006, the Seventh Circuit Court of Appeals released an important ruling in United States ex rel. Garbe v. Kmart Corporation, a False Claims Act case brought by James Garbe on behalf of the United States against Kmart. According to the complaint, Garbe, a pharmacist at Kmart, noticed that another pharmacy charged his Medicare Part D insurer substantially less that Kmart typically charged insurers for the same prescription. He investigated and found that Kmart routinely charged customers paying out of pocket less than it charged those paying with insurance (public or private). He also found that most cash customers took part in Kmart’s “discount programs” and that this discount price was not included when Kmart calculated its “usual and customary” prices on generic medications for purposes of Medicare reimbursement.

August 8, 2016

Charges in an Allegedly Massive Scheme Highlight the Danger of Medicare Fraud

by Gregory J. Brod

Is Medicare fraud really that big of a problem? After all, doesn’t fraud exist in almost every sector of the economy? Why focus so much energy on one issue? As recently filed charges in one case show, Medicare fraud is an enormous problem that costs our government billions of dollars every year. Stealing from the government is, in essence, stealing from every single taxpayer. Medicare fraud diverts money from those who truly need and deserve health care services and puts the money in the pockets of wrongdoers. At the same time, there is also very specific, personal harm to patients whose providers are involved in fraudulent schemes, patients whose health is put in jeopardy because a provider puts profit over care.

DOJ Announces Allegations of Fraudulent Medicare Billing in Excess of $1 Billion

Late last month, Assistant Attorney General Leslie R. Caldwell publicly announced the unsealing of charges in what she called “the largest single criminal health care fraud case ever brought against individuals by the Department of Justice.” The case involves allegations of fraudulent billing that total over $1 billion. The allegations are focused on a group in South Florida, a region particularly hard hit by Medicare fraud.

August 1, 2016

A Special Threat: Allegations of Faulty Ballistic Helmets Serve as Reminder of Why We are a Proud to be a Whistleblowers’ Law Firm Handling Cases of Defense Contract Fraud

by Gregory J. Brod

Last week, we wrote about the importance of the False Claims Act as a tool for fighting defense contract fraud. This week, we continue that discussion by focusing on a case that we touched upon in last week’s post. This case stands out as particularly egregious of allegations that, if true, could have cost countless military members their lives. It is an important example of the type of military contract fraud that honest whistleblowers can help bring to an end when they partner with the team at our government contract fraud law firm.

Defense Contractor to Pay $3 Million to Settle Allegations Regarding Ballistic Helmets that Failed Safety Tests

Earlier this year, the Department of Justice (“DOJ”) issued a press release announcing that ArmorSource, LLC would pay $3 million to settle a lawsuit filed pursuant to the False Claims Act. As the DOJ explains, the U.S. Army entered into a contract with ArmorSource in 2006 pursuant to which the company was to manufacture Advanced Combat Helmets (“ACHs”). ACHs are used by soldiers in combat and made out of Kevlar to help provide ballistic protection for the wearer. According to the government, from 2006 to 2009, ArmorSource provided the Army with ACHs that did not conform to the requirements in the government contract and did not meet contract performance standards. The Army began recalling the ArmorSource helmets in May 2010 after several lots failed ballistic safety tests.

July 25, 2016

Using the False Claims Act to Fight Defense Contract Fraud

by Gregory J. Brod

It’s no secret that as a government fraud whistleblowers’ law firm, we are big fans of the False Claims Act (“FCA”). The FCA is a valuable tool that gives ordinary citizens the power to help fight back against frauds perpetrated on the federal government. While we often write about health care fraud matters, one of the most important things to know about the FCA is that it can apply to frauds involving a wide-range of subject matters. In these complex times, the FCA’s power is especially critical for fighting instances of defense contractor fraud.

Government Files Suit Alleging Defense Contractor Committed Fraud in Conjunction with Contract to Train Iraqi Civilian Police Forces

Last week, the Department of Justice (“DOJ”) issued a press release announcing that it had filed suit against DynCorp International Inc. (“DynCorp”), a government contractor headquartered in Northern Virginia, for allegedly submitting inflated claims for payment pursuant to a State Department contract. In 2004, the State Department awarded DynCorp a contract to train civilian police forces in Iraq and provide other services related to that effort. The government alleges that DynCorp knowingly permitted one of its main subcontractors to charge “excessive and unsubstantiated rates” for lodging, security, driving, and other services and that DynCorp included those charges in the claims for payment it submitted to the State Department. Additionally, the DOJ alleges that DynCorp added a markup to these already excessive charges that further inflated the amount charged.

July 18, 2016

Medicare Fraud Spotlight: False Claims Act Lawyer on the Threat of Hospice Care Fraud

by Gregory J. Brod

Anyone who has ever watched a loved one fight through the final stages of a terminal illness knows how important kindness is during these times. Some of the kindest and most caring people in the world work with terminal patients and their families in hospice care settings. On behalf of everyone these people touch, we want to say thank you. It is because we respect these workers so much and understand the importance of their work that we are particularly angered by the allegations in a recent false claims act case accusing a health care provider of hospice care fraud. This case is a reminder of the very profound real world impact of health care fraud and it is one example of why we choose to serve as a health care fraud whistleblowers’ law firm.

Hospice Provider to Pay $18 Million to Settle Medicare Fraud Allegations

On July 13, the Department of Justice (“DOJ”) issued a press release announcing that a hospice care provider has agreed to pay $18 million to settle pending allegations of False Claims Act violations. The defendant, Evercare Hospice and Palliative Care (“Evercare”), now known as Optum Palliative and Hospice Care, is based in Minnesota and provides hospice care in several different states. As the DOJ explains, hospice care is a special form of care aimed at providing comfort to the terminally ill. Hospice care patients receive palliative care only and do not receive medical care aimed at treating their illnesses. Medicare only allows patients with a life expectancy of six months or less to receive coverage for hospice care.

July 11, 2016

Trends in False Claims Act Litigation: Individual Liability

by Gregory J. Brod

Regular readers of this blog know that part of what makes the False Claims Act such a powerful tool is its qui tam provision which allows individuals to bring claims for repayment on the government’s behalf. This is important because the government cannot police every single claim it pays and individuals who witness fraud and act on that knowledge are critical to the fight against fraud. A recent trend in litigation under the Act involves individuals in a very different sense – individual liability under the False Claims Act. Our whistleblowers’ law firm for fraud on the government is watching this trend and is prepared to help honest individuals fight fraud committed by both organizations and individuals.

DOJ Focuses in on Individual Liability for Corporate Wrongdoing

At the beginning of the year, Becker’s Hospital Review, a leader in healthcare industry information, published a piece entitled “5 False Claims Act Trends, Cases that will Fuel Recoveries in 2016.” One of the trends identified in this article is a “spotlight on individual liability” whereby the government is increasingly holding individuals, not just the companies they work for, liable for fraud. This stance grows, in part, out of a Department of Justice (“DOJ”) memorandum issued in September 2015 that discusses steps the DOJ is taking to increase legal accountability for individual corporate wrongdoing. One change announced in the memo is that corporations will only receive credit for cooperating with an investigation if they reveal the names of the individuals involved in the fraud.

June 27, 2016

The Escobar Decision: Whistleblowers’ Law Firm Applauds a Major Ruling from the Supreme Court Interpreting the False Claims Act

by Gregory J. Brod

The False Claims Act (“FCA” or “the Act”) is a powerful tool that allows private citizens to play a key role in fighting fraud on the federal government. As we have reported in previous blog posts, this term the Supreme Court agreed to look at a disagreement among appellate courts regarding the issue known as implied certification. Our whistleblowers’ law firm is pleased to report that the Court recently released a decision that affirms and strengthens the Act, ensuring it is available to fight a wide range of fraudulent acts.

Background: The Implied Certification Theory and the Escobar Case

As explained in The False Claims Act: A Primer, a guide released by the Department of Justice (“DOJ”), a person violates the FCA when they knowingly submit a false claim for payment to the government, knowingly cause another to submit a false claim, or knowingly create a false record/statement in order to induce the government to pay a false claim. The Act was originally passed during the Civil War. It underwent substantial revisions in the 1980s and again in 2009 and 2010.

June 20, 2016

Spotlight on Government Contract Fraud: The Violation of Small Business Set-Aside Provisions

by Gregory J. Brod

As a small law firm, we are particularly aware of the many contributions that small businesses and small business owners make to our economy. In our case, we believe being a small firm allows us to have a more personal touch and collaborate more closely with every client while providing top-notch legal services. There are also unique challenges to running a small business. One way that the government recognizes these important contributions and special challenges is by requiring that a certain percentage of federal contracts be awarded to small businesses. Sadly, some companies attempt to lie to the government and the American people by holding themselves out as small businesses when they truly do not qualify as such. This a form of fraud. Our government contract fraud lawyer is dedicated to partnering with honest individuals to protect the integrity of small business set-aside programs and ferret out other forms of fraud on the federal government.

Construction Company Pays $5.4 Million to Settle Government Contract Fraud Allegations

Earlier this month, the Times of San Diego reported that a California-based construction company paid $5.4 million to settle allegations of fraudulent billing for work performed at Camp Pendleton and other military bases. Harper Construction is a privately held company that earns a substantial share of its revenue through government contracts. As indicated in the report, Harper had contracts to construct facilities at the military bases and these contracts specifically required that Harper subcontract a specified portion of the work to small disadvantaged businesses. These requirements stem from government programs intended to ensure that such businesses receive a fair share of federal contract dollars. According to the article, Harper stood accused of knowingly using sham companies and falsely certifying that it complied with the small business subcontracting requirements. Instead of having legitimate small businesses perform the work, the lawsuit alleged that Harper actually passed the work to a large affiliate.

June 13, 2016

Pharmaceutical Company Fraud and the False Claims Act

by Gregory J. Brod

Few decisions are as important as those regarding our health and the health of our loved ones. Decisions about medications, like many other health-related issues, involves a weighing of risks and benefits. With increased direct-to-consumer advertising and pressure on doctors from corporations, this calculus can be extremely hard. Americans must be able to trust that information released by pharmaceutical companies is accurate. In some cases, pharmaceutical company fraud can amount to a violation of the False Claims Act which means ordinary Americans have the power to fight back with the help of our health care fraud law firm.

Settlement in Suit Alleging Pharmaceutical Companies Misled Doctors and Others About Cancer Drug

On June 6, the Department of Justice (“DOJ”) announced that Genentech Inc. and OSI Pharmaceuticals LLC will collectively pay $67 million to settle allegations the companies made misleading statements about the drug Tarceva. A lawsuit filed under the False Claims Act alleged that, from 2006 through 2011, the companies made misleading representations to medical care providers about Tarceva’s ability to treat certain non-small cell lung cancers. In actuality, according to the DOJ, there was little evidence that Tarceva could treat these cancers unless a patient had never smoked or had a particular mutation in their epidermal growth factor receptor.