Qui Tam / Whistleblower

Layman’s Guide to Understanding the Federal Anti-Kickback Statute and Stark Law

April 23, 2020 | Robert David Malove

Corrupt-doctor In a nutshell, the federal Anti-Kickback Statute and Stark Law make it a crime with serious penalties for providers of medical services to pay or accept any form of remuneration such as kickbacks or anything of value in exchange for receiving referrals of patients who obtain medical treatment paid by government healthcare programs including Medicare and Medicaid, and from entering into certain kinds of financial relationships.

The Anti-Kickback Statute and the Stark Law are designed to keep medical treatment decisions independent from any influence of possible financial gain. The Anti-Kickback Law and the laws prohibiting other unlawful financial arrangements are designed to prevent healthcare providers from referring patients for healthcare services that are not medically necessary.

The Department of Justice has declared that, “[p]atients are entitled to be sure that the care they receive is based on their actual medical needs rather than the financial interests of their physician.”

FALSE CLAIMS LAWSUIT LEADS TO GOVERNMENT INTERVENTION

August 9, 2011 | Robert David Malove

WASHINGTON D.C. (AUGUST 9, 2011) – The U.S. Department of Justice has announced it is intervening in a lawsuit filed under the qui tam provisions of the False Claims Act against Nurses’ Registry and Home Health Corporation brought in the U.S. District Court for the Eastern District of Kentucky.

Under the qui tam provisions of the Act, individuals can initiate lawsuits on behalf of the United States and share in any monies received as the result of the suit. In this case, two former employees of Nurses’ Registry, Alicia Robinson-Hill and David Price, accused the home health agency of exaggerating medical conditions and needs of patients in order to increase the dollar amount of claims presented to Medicare and making false claims to Medicare for unnecessary home health services.

The government has asked the court to allow 45 days in order to present its complaint against Nurses’ Registry and Home Health Corporation.

Whistleblower Alleges Drug Salespeople, not Doctors Dictated Dosages of Medicine

December 1, 2009 | Robert David Malove

In an interesting suit filed against Amgen, the maker of Epogen, as well as two large dialysis clinic chains, Fresenius and Davita, a whistleblower alleges that salespeople for the drug company told clinic operators and physicians working there to prescribe specific dosage levels of the drug Epogen for patients based upon the maximum reimbursement under Medicare for the drug rather than actual patient needs.
Epogen, used to treat anemia, comes in 1 ml vials with various unit doses between 1000 and 10,000 units of the drug. The cost, and reimbursement for the vials, administered to the patients at the clinics, can vary dramatically based upon the unit dosage used. The whistleblower is a former sales manager for Amgen and is also a nurse practitioner. The Federal False Claims Act requires the person bringing the suit on behalf of the federal government, referred to as a Relator, to have first hand knowledge of the fraud alleged. The Relator can receive up to 25% of the amount recovered under the suit.
For more, click here.

Are Large Corporations Treated Differently? Pfizer $2 Billion False Claims Act Settlement Is Its Second In Six Years

November 13, 2009 | Robert David Malove

Often, we hear that white collar crime is treated differently than other types of crime. However, it is often who commits white collar crime that brings about different treatment. I had a client indicted for fraud related to a DME. Monthly, he would send me articles about large DME companies paying large fines and false claims settlements for the same conduct he was alleged to have engaged in and asked the simple question, “Why am I supposed to go to jail and they don’t?”

People arrested for crimes, and in particular health care fraud can find many rationales for conduct that objectively looks bad; some form the bases for defenses; some are to try to feel better. One reaction is generally the same for nearly all, whether it is speeding or a million dollar fraud, “everyone is doing it.” A variation on that theme, and a fair one is that often individuals and small companies are treated much differently than much larger companies.

In 2004, at the same time Pfizer was negotiating a resolution of a $460 million settlement with the United States for unlawful “off label” uses of its drugs, it also was planning and executing marketing campaigns for other drugs doing precisely the same conduct. The results, a huge fine and restitution, but no criminal charges for individuals. An individual that takes a million dollars in a Medicare fraud scheme is going to jail; as are employees and others most closely associated with that person and the scheme. The world’s largest drug company agreed it participated in a $1 billion in Medicare fraud and pays money. The company, or likely a subsidiary, also plead guilty to a crime, but no person goes to jail. $2 billion is not a small sum, but many sitting in prison wonder why the rules are different.

Whistleblower Lawsuit Alleges Medicare Fraud by Fresenius North America

November 7, 2009 | Robert David Malove

A Federal False Claims Act Case filed by an employee of a dialysis center owned by Fresenius North America, which has over 1500 clinics serving dialysis patients, alleges that a clinics in El Paso and elsewhere used unlicensed employees to cover for supervision required to be performed by physicians. The company denies the allegations. However, this is the same company that in January of 2000 settled one of the largest Federal False Claims Act Cases in US history (actually the 12th largest) with an agreement to pay $486 million in false claims and penalties for various practices involving false claims and kickbacks.
To read more click here.

CEO of Insurer, WellCare, Resigns Following Fraud Settlement

July 2, 2009 | Robert David Malove

The CEO of WellCare Health Plans, Inc., Health Schiesser, resigned after the insurer reached an agreement to settle claims with the federal government and Florida Medicaid for $80 million. The company is also keeping a reserve of $50 million to pay other claims. The settlement is the result of a whistleblower suit by a former employee, alleging that that company used a shell company to bill the insurer for services it did not perform as to inflate Wellcare’s claims to the federal government and Medicaid. The HCFBlog has written about this before here.
For more on this click here.

Wyeth Gets Agita From Whistleblower Law Suit Seeking Hundreds Of Millions For Stomach Acid Medication Rebates

May 20, 2009 | Robert David Malove

The Justice Department and 16 Attorneys General joined a whistleblower lawsuit alleging that Wyeth Labs offered lower prices on two prescription drugs that were not offered to the Medicaid Programs of the various states avoiding hundreds of millions of dollars in rebate payments owed to state Medicaid Programs. Under the Medicaid rebate programs of most states, manufacturers are required to offer the same discount pricing to the program as they do to customers. The suit alleges hospitals received steep discounts that were not provided to the states in order to gain access to hospital patients.
To read more, click here.

New Mortgage Fraud Law May Expand False Claims Act

May 1, 2009 | Robert David Malove

The Senate recently approved the Fraud Enforcement and Recovery Act of 2009, originally designed to combat mortgage fraud, however the Act also expands the Federal False Claims Act, generally brought by whistleblowers against health care providers. Pursuant to the Act, the government won’t have to prove that the defendant intended to defraud the U.S. government. The violator would only have to have had knowledge of information that a claim might be false, acted deliberately without verifying the information, or acted in reckless disregard of the truth or falsity of the information. Currently, the False Claims Act requires specific Knowledge of fraud.
The government recovered more than $15 billion using lawsuits under the False Claims Act from 2000 to 2008.
To read more click here.

Whistleblower to Collect $45M

April 16, 2009 | Robert David Malove

As the results of a whistleblower lawsuit under the federal False Claims Act, a division of Quest labs of New Jersey entered a guilty plea in federal court to a felony charge of misbranding in Wednesday and agreed to pay $302 million which includes a 40 million dollar criminal penalty to settle charges that it marketed a flawed renal testing kit for kidney dialysis patients that produced inaccurate results.
Thomas Cantor, a CEO of a lab in California , will collect $45 million of the settlement as Relator. Under the False Claims Act, a Relator privately initiates a lawsuit on behalf of the government for fraud on government programs and receives up to 15 percent of any recovery.
For more details, click here.