In January 2018, the California Division of Workers’ Compensation (DWC) suspended 18 medical providers. These providers, many of whom are physicians, can no longer work in the state’s workers’ compensation system due to the loss of their medical license, criminal conduct, or fraud.
DWC Require to Suspend Certain Providers
AB 1244 went into effect January 1, 2017. This law requires the DWC to suspend any doctor or other medical provider from participating in the workers’ compensation system if:
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.
B
ackground 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.
Anyone who h
as 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.
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.
Cancer. Rarely can one word strike so much fear. We have come so far in both cancer prevention and cancer treatment; yet we also have so much farther to go before we can truly say we’ve triumphed over this massive beast. One major challenge is the cost of treating cancer. While much of that cost is due to the challenges of medical research, some companies are deliberately over-charging cancer patients and their insurance providers by billing for expensive and unnecessary services. The battle against cancer treatment fraud is yet another example of a front in which the False Claims Act can be a tool for justice and even a tool for health. As a health care fraud law firm, we partner with whistleblowers to fight these wrongs and ensure health care funds are available for true medical needs.
Company Pays Nearly $34.7 Million to Settle Allegations of Overbilling for Cancer Treatment
Earlier this Spring, the Department of Justice (“DOJ”) announced that 21st Century Oncology agreed to pay nearly $34.7 million to settle a False Claims Act lawsuit alleging they performed and billed federal health care agencies (e.g., 
Medicare, Tricare, Medicaid) for procedures that were not medically necessary. The underlying suit involved a procedure called the Gamma function which measures the exit dose radiating from an individual after radiation treatments. The government alleged that the company performed and billed for this procedure when it was not needed for any medically appropriate purpose. Additionally, the suit alleged that 21st Century billed for Gamma function treatments in cases where no physician reviewed the results in a timely manner and in cases where technical equipment failures meant no results could be obtained. The suit was originally brought by a former physicist with a Florida oncology company who filed the claims under the whistleblower or qui tam provisions of the False Claims Act and who will receive over $7 million for his role in the case.
As concerned citizens and as a health care fraud law firm, our team continues to be pleased with the terrific successes whistleblowers are having using the False Claims Act, Anti-Kickback Statute and related federal and state statutes to fight fraud in the medical field. A major settlement announced this month involving improper health care kickbacks shows just how successful these cases can be and how several different laws can work in concert to provide justice. Yet, we know that for every victory, there are countless other companies and individuals committing health care fraud and stealing from the American people. We cover these issues extensively to let those who witness these crimes know they are not alone. We are here to help them follow the right path and truly do a service to their country.
DOJ Announces Largest Total Settlement Involving Illegal Kickbacks in Medical Device Field
The Department of Justice (“DOJ”) announced this month that the largest distributor of endoscopes and related equipment has agreed to pay $623.2 million to settle several lawsuits involving allegations it paid inappropriate kickbacks to doctors and hospitals. Defendant Olympus Corporation of the Americas (“Olympus”) has admitted to the allegations in a criminal complaint filed in a New Jersey federal court based on the Anti-Kickback Statute (“AKS”) and the related suits rest on similar allegations. This settlement involves the largest total amount paid to date by a medical device company for violations involving the AKS. Olympus has entered into a deferred prosecution agreement that allows it to avoid criminal conviction if it complies with the reforms contained in the agreement.
Last year, our health care fraud
whistleblowers’ law firm reported on an important issue in the False Claims Act arena: implied certification. The implied certification theory has the potential to be a powerful tool in the fight against fraud and, when we last discussed the topic, the Fourth Circuit Court of Appeals had ruled in favor of the theory. However, there has been disagreement on the issue among the federal appellate courts and the issue is headed to the Supreme Court. We continue to believe in the implied certification theory and we are closely following the issue as it makes its way to the highest court in the land.
The Escobar Case
As Modern Healthcare recently reported, the implied certification theory is heading to the Supreme Court via the case of Universal Health Services v. United States ex rel Escobar. The case involves a claim filed by the parents of a teenager who died while under the care of a mental health clinic. The plaintiffs allege that the clinic’s staff was not properly supervised and that the clinic lacked required board-certified or board-eligible supervisory personnel. As the First Circuit wrote, “The crux of their complaint is that [Defendants’] alleged noncompliance with sundry supervision and licensure requirements rendered its reimbursement claims submitted to the state Medicaid agency actionably false under both the federal and Massachusetts False Claims Acts.”
The False Claims Act (“FCA” or “the Act”) is one of the most important tools we have in the fight against health care fraud and other frauds on the federal government. When an organization or individual knowingly takes more money from the government than the law allows or otherwise submits a false claim to the government, the FCA allows the government to recover triple damages plus an appropriate penalty. Examples of false claims include overcharging Medicare for medical treatment and supplying the military with goods that don’t meet contractual requirements. The Act has a special qui tam provision that allows individuals to act as whistleblowers and bring claims on the government’s behalf, a critical tool because fraud is difficult to uncover without help. Although the law provides whistleblowers with a substantial reward for their time and effort if their case leads to a recovery via either a settlement or judgment, most whistleblowers are motivated by a desire to do the right thing and our government fraud law firm is proud to help them.
Recently, we’ve looked back on the success of the FCA in 2015. Today, we look ahead at what 2016 may hold in the health care fraud arena, the sector responsible for the largest share of FCA recoveries in 2015. Becker’s Hospital Review, a leading journal for the health care industry, identifies the following five trends expected to fuel FCA recoveries in the coming year[1]:
Last week, we looked at the recoveries made on behalf of the federal government using the False Claims Act (“FCA”) in 2015. While informative, those numbers don’t tell the whole story. Many states have their own versions of the FCA. These statutes are particularly important in the Medicaid fraud arena since Medicaid is a state and federal partnership so fraud typically involves both federal and state funds. Today, our government fraud law firm looks at one such statute, Washington’s Medicaid Fraud False Claims Act (“WFCA”). Each state’s laws are unique, but this review can help readers understand the importance of state claims in this arena.
Washington’s Legislative Auditor Reviews the State False Claims Act, Recommends Reauthorization
In 2015, with the WFCA set to expire on June 30, 2016, the state’s Legislative Auditor undertook to study the statute, its results, and recommend or counsel against reauthorization. As the resulting report (Proposed Final Report issued 12/16/15) explains, government can investigate possible Medicaid fraud via federal (civil and/or criminal) investigations, state criminal investigations, and state civil investigations. Absent reauthorization, Washington would lose the authority for the final category. Additionally, if the federal government is investigating a case that also involved fraud on Washington state, the state can only participate in the case and any recovery if it has a state FCA that (like the WFCA) meets certain standards set forth in the federal law.
It’s something you learn in preschool, but sometimes it seems like a lesson modern medicine has forgotten – Everybody is unique (and that’s a good thing!). Medicine should be tailored to individual patient’s needs; after all, that’s why we go to the doctor individually rather than showing up with thirty others and being handed the same treatment as everyone else. Sometimes, however, companies forget this and often profit seems to be the motivating factor. Using overly generalized profiles to justify unnecessary, costly tests and/or treatments can be a form of health care fraud. The law empowers both patients and conscientious professionals to fight these misdeeds, wrongs that can be both costly and dangerous. As a whistleblowers’ law firm specializing in health care fraud, The Brod Law Firm can help. Together, we can bring an end to unnecessary billing based on general profiles and ensure medicine focuses on the individual.
Lab Company Settles Claims it Billed for Unnecessary, Generalized Services
On October 19, the United States Department of Justice (“DOJ”) issued a press release announcing the settlement of multiple False Claims Act lawsuits against Millennium Health, a company headquartered in California. Millennium agreed to pay $256 million to resolve claims they billed Medicare, Medicaid, and other federal programs for services that were not medically necessary and allegations they provided free items to medical practitioners in exchange for their use of company services. While the settlement resolves the legal claims in several whistleblower suits, Millennium did not admit any wrongdoing.
Healthcare Fraud Lawyer Blog