Grassley Senate Floor statement on False Claims Act

A longtime champion of whistleblower rights, Senator Chuck Grassley (R-Iowa) recently provided a strong reminder of the importance of the False Claims Act:

 We have decades of data showing that the government cannot stop fraud by itself. I also know from many years of oversight that purely administrative remedies are very time consuming and often toothless.

The government should be able to decide how best to protect the taxpayers from fraud. The FCA is the most effective tool the government has. The government should be able to use it, without the courts piling on bogus restrictions that are just not in the law.

American taxpayers are fortunate to have leaders like Senator Grassley working to ensure that the False Claims Act remains an effective tool to combat fraud.

To see Senator Grassley’s full Senate Floor Statement, click here:

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Government Intervenes in Lawsuits Alleging That Skilled Nursing Chain SavaSeniorCare Provided Medically Unnecessary Therapy

The government has intervened in three False Claims Act lawsuits and filed a consolidated complaint against SavaSeniorCare LLC and related entities (Sava) alleging that Sava knowingly and routinely submitted false claims to Medicare for rehabilitation therapy services that were not medically reasonable and necessary, the Department of Justice announced today.  Sava is one of the nation’s largest healthcare providers, operating approximately 200 skilled nursing facilities (SNFs) in 23 states.

“The provision of Medicare benefits must be dictated by patient need, not by Medicare providers’ efforts to maximize profits by pressuring their employees to provide medically unnecessary services,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division.  “The Department of Justice will continue to aggressively pursue companies that seek to engage in this kind of fraudulent scheme.”

The government’s complaint alleges that Sava exerted significant pressure on its SNFs to meet unrealistic financial goals that resulted in the provision of medically unreasonable, unnecessary and unskilled services to Medicare patients.  Sava allegedly set these aggressive, prospective corporate targets for the highest Medicare reimbursement rates to significantly increase Sava’s revenues without regard for its patients’ actual clinical needs and then pressured its staff to meet those goals.  Sava also allegedly delayed discharging patients from its facilities, even though the patients were medically ready to be discharged, in order to increase its Medicare payments.

“Enforcing the False Claims Act and combating healthcare fraud remains a top priority of the U.S. Attorney’s Office,” said U.S. Attorney David Rivera of the Middle District of Tennessee.  “When healthcare providers subject patients to unnecessary treatment, we will intervene and hold them accountable.”

The three consolidated lawsuits were filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government for false claims for government funds and to receive a share of any recovery.  The False Claims Act also permits the government to intervene in such lawsuits, as it has done in these cases.  Under the Act, a defendant that is found liable is subject to damages equal to three times the government’s loss plus applicable penalties.

The government’s intervention in these matters illustrates its emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $26.2 billion through False Claims Act cases, with more than $16.4 billion of that amount recovered in cases involving fraud against federal health care programs.  Tips and complaints from all sources about potential fraud, waste, abuse and mismanagement, including the conduct described in the United States’ complaint, can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).

The lawsuits are being handled by the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office of the Middle District of Tennessee.  Investigative support is being provided by the U.S. Attorneys’ Offices of the Southern District of Texas and the Western District of Texas; the Offices of Inspector General for the Department of Health and Human Services and the Office of Personnel Management and the National Association of Medicaid Fraud Control Units.

The cases are captioned United States ex rel. Hayward v. SavaSeniorCare, LLC, et al., No. 3:11-0821 (M.D. Tenn.); United States ex rel. Scott v. SavaSeniorCare Administrative Services, LLC, 3:15-0404 (M.D. Tenn.); and United States ex rel. Kukoyi v. Sava Senior Care, L.L.C., et al., No. 3:15-1102 (M.D. Tenn.).

The claims asserted in the government’s complaint against Sava are allegations only and there has been no determination of liability.

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Whistleblower Receives $1.28 Million For Exposing Fraudulent Billing Practices On Navy Contracts

A whistleblower will receive $1.28 million for filing a False Claims Act lawsuit against Vector Planning and Services Inc. (VPSI), an information technology company and consulting firm based in Virginia.

The whistleblower lawsuit alleged that VPSI inflated its indirect cost billings to the government by improperly including direct costs for which it had already been paid, and also submitted claims for other costs that were never incurred.

The whistleblower’s reward resulted from a settlement in which $6.5 million was recovered on behalf of U.S. taxpayers.

For more information on this case, click here:

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Whistleblower Rewarded With $17.24 Million For Exposing Violations Of Anti-Kickback Statute

A former employee of Omnicare, Inc. received $17.24 million as a reward for filing a False Claims Act lawsuit that exposed violations of the Anti-Kickback Statute.

This award was part of a $124.24 million settlement resolving allegations that Omnicare, Inc. entered into below-cost contracts to supply pharmaceutical drugs to skilled nursing facilities and their resident patients in order to induce the facilities to select Omnicare, Inc. as their pharmacy provider.

The Anti-Kickback Statute prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid and other federally funded programs.  The Anti-Kickback Statute is intended to ensure that the selection of health care providers and suppliers is not compromised by improper financial incentives and is instead based on the best interests of the patient.

For more information on this case, click here:

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Barrett Law Office Helps Whistleblower Expose Cancer Clinic Fraud

Patients at the Rose Cancer Center in Mississippi thought they were receiving the treatment they desperately needed to fight their devastating disease. Unbeknownst to them, however, the clinic physician, Dr. Meera Sachdeva, was diluting their medicine, billing for services not provided, and forcing unqualified staff to perform critical medical procedures. Moreover, in order to conceal her fraud, Dr. Sachdeva instructed staff to falsify medical records.

In addition to the obvious adverse effects on the health of patients, Dr. Sachdeva’s conduct also defrauded the federal government of millions of dollars in Medicare funds, as well as private insurers who provided insurance coverage for the cancer center’s unfortunate patients.

Dr. Sachdeva might still be getting away with this reprehensible conduct if not for a brave employee named Kristi Beeson. Shortly after being hired as a laboratory technician at Rose Cancer Center, Kristi began to suspect that Dr. Sachdeva was involved in something very sinister. Her suspicions were confirmed when she herself was bluntly told to “correct”irregularities in patient medical records.

Refusing to participate in Dr. Sachdeva’s horrific scheme, Kristi contacted the authorities and exposed Dr. Sachdeva’s criminal conduct. The United States District Attorney for the Southern District of Mississippi initiated a criminal prosecution of Dr. Sachdeva, and Kristi provided crucial assistance that ultimately led to Dr. Sachdeva’s conviction. In addition to receiving a twenty year prison sentence, Dr. Sachdeva forfeited approximately $5.7 million in assets she obtained by defrauding Medicare.

In addition to assisting the federal criminal prosecution, Kristi also filed a whistleblower lawsuit under the qui tam provisions of the False Claims Act. We are proud to have served as her counsel in this case along with Marlene Koury and Gordon Schnell of the Constantine Cannon firm, and Jonathan Barrett of Barrett Law, PLLC in Mississippi.

For more information on this case, follow the links below:

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Cancer Center Fraudster Pays $5.7M To End FCA Suit

Law360, Washington (August 18, 2014, 5:36 PM ET) — The former owner of a chemotherapy clinic sentenced to two decades in prison for defrauding Medicare, Medicaid and private insurers will pay $5.7 million to end a related whistleblower False Claims Act suit in Mississippi federal court, counsel for the relator announced Monday.

Meera Sachdeva, a doctor and the former owner of the Rose Cancer Center in Summit, Mississippi, will pay the $5.7 million out of the more than $8.4 million in fines and restitution she had earlier agreed to pay in her related criminal case, according to an announcement from Constantine Cannon LLP, one of the firms representing relator Kristi Beeson.

Marlene Koury, a member of the firm’s whistleblower practice, said in a statement Monday that Beeson’s role in the case had demonstrated the “critical” role whistleblowers play in helping root out health care fraud, praising her for coming forward with her complaint.

“But for the courage of Ms. Beeson stepping forward, this outrageous conduct likely would have gone on for years, with Dr. Sachdeva taking advantage of people during the most vulnerable time of their lives,” Koury said.

Beeson, a former laboratory technician at the cancer center, had filed her complaint after witnessing a number of fraudulent practices at the clinic that were charged to government and private payers, including unqualified staff performing bone marrow biopsies, the use of single doses of drugs for multiple patients, and the falsification of patient records to charge for services that were not performed at all, according to the announcement.

After this misconduct was brought to the attention of the federal government, it launched a criminal probe, raided the clinic and eventually shut it down, charging Sachdeva, Rose office manager Brittany McCoskey and outside medical biller Monica Weeks — accused of helping to cover up claims due for an audit — with health care fraud in September 2011.

In the criminal case, which also saw Sachdeva charged with money laundering, prosecutors claimed that the clinic had billed payers for reimbursement of higher quantities of drugs than it had actually purchased, as well as reusing syringes and drawing multiple patients’ chemotherapy drugs from the same bag, meaning they did not receive the full dosage they should have, among other allegations. Medicare and Medicaid were billed for more than $15.1 million by the clinic across the relevant period, according to the indictment.

All three defendants pled guilty after reaching plea agreements in 2012, with Sachdeva receiving a total of 240 months in prison and being ordered to pay $8.4 million in fines. Weeks received three years’ probation and was ordered to pay nearly $22,000, while McCoskey received 13 months in prison and a $55,000 restitution order.

Beeson said in a statement Monday that she was pleased to see Sachdeva receive a prison sentence for her “harmful acts,” saying that the patients who had been mistreated by the doctor are now “receiving the correct medical treatment they deserve.”

For bringing her qui tam suit — unsealed last week with the resolution of the case, according to her counsel, although the case is still unable to be publicly accessed as of Monday afternoon — she will share with three other whistleblowers about $500,000 in proceeds from the forfeiture, with additional proceeds to go both to the government and private insurers, according to the announcement.

Beeson is represented by Patrick M. Barrett III of Barrett Law Office PLLC, by Marlene Koury of Constantine Cannon LLP and by Jonathan Barrett.

Counsel information for the government, Sachdeva and the other three whistleblowers wasn’t immediately available.

The criminal case is U.S. v. Sachdeva, case number 3:11-cr-00068, in the U.S. District Court for the Southern District of Mississippi. The civil case is in the same court, with further details not yet available Monday.
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DoJ: The False Claims Act Is A Formula That Works

America’s taxpayers are in a long-term battle against powerful and well-funded corporate cheats and thieves.

Fraud is a core part of some company business plans, and incentivized integrity programs are a threat to their bottom line.

Opposition to federal and state False Claims Acts is entrenched.  The liars are cunning and powerful.

Above all, they are patient.

For more than 25 years TAF and the TAF Education Fund have successfully promoted whistleblower laws and outreach.

As a result, the False Claims Act has survived attacks in Congress and at the Supreme Court. We have worked to amend and strengthen the law. We have worked to expand the False Claims Act to the states, and we have sparked the creation of new incentivized whistleblower legislation targeting tax fraud, securities fraud, and commodities trading fraud.

But corporate lobbyists still prowl Capitol Hill.

Apologists for fraud push and probe for weaknesses.

They suggest capping whistleblower awards, knowing such a move will remove incentives to bring large cases.

Eager to cap integrity, they are little less eager to put a cap on fraud!

Exclude officers and managers in fraud cases when scores of millions, and even billions of dollars have been stolen from the American people?  They are opposed to that!

Require a salary cap for the CEOs of fraudster corporations as a condition of settlement?  Let’s not be too hasty!

Increase staffing within DoJ’s Civil Division so that cases can be moved forward more expeditiously? They will never suggest it.

And why would they?  Fraud against America’s taxpayers is big business.  In fact, stealing money from the U.S. Treasury is so profitable that some fraudster companies now have lawyers on permanent retainer in Washington with the sole mission of undermining incentivized integrity programs.

The good news is the TAF Education Fund need only tell stories of success to show the power of current law.

Or, as Attorney General Eric Holder put it when asked about the Chamber of Commerce’s attempts to cap whistleblower awards:

“The Act has presently constructed, is working extremely, extremely well.… In the past 25 years, we have had nearly 8,000 qui tam cases filed, and they have yielded more than $21 billion in recoveries for the United States, $3.4 billion in recoveries to relators. In Fiscal Year 2011 alone, the Department recovered more than $2.7 billion in qui tam cases, and relators received about $530 million dollars as their statutory share.

The statute as it is presently constructed works, and works quite well.

I would be reluctant to fool around with a formula that for the past 25 year has been shown to be an effective tool in getting at fraud and incentivizing people to stay involved in the process, and working with government as partners.”

Three years and $15 billion additional dollars later, we couldn’t say it better ourselves.

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Whistleblower Lawsuit Exposing Wound Care Clinic Fraud Leads To $4.3 Million Settlement

Operators of the Lymphedema & Wound Care Institute Inc. in Houston have agreed to pay $4.3 million to settle a whistleblower’s allegations that they improperly billed Medicare for physical therapy treatments provided by unqualified therapists.

According to the whistleblower, a physician who treats patients with lymphedema, the defendants billed Medicare for lymphatic drainage therapy that was performed by massage therapists.  Under Medicare rules, the subject therapy must be conducted by physical therapists in order to qualify for Medicare reimbursement.

As a reward for exposing this fraud by filing a False Claims Act lawsuit, the whistleblower will receive 19% of the settlement proceeds.

For more information on this case, click here:

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Pharmacy Benefit Management Company Pays $4.25 Million To Settle Whistleblower Lawsuit

Caremark LLC (“Caremark”) agreed to pay $4.25 million to resolve a False Claims Act lawsuit alleging that it failed to reimburse Medicaid for prescription drug costs that should have been paid by private health insurance plans.  Caremark is a pharmacy benefit management company operated by CVS Caremark Corp.

 “Dual eligible” individuals are covered by Medicaid as well as private health insurance, but federal law requires that private insurers assume their health care costs.  Medicaid is entitled to reimbursement of any prescription claims it pays for dual eligibles.

Using a computer claims processing program, Caremark allegedly cancelled claims for reimbursement submitted by Medicaid for dual eligibles, thereby shifting prescription drug costs to the government.

This False Claims Act lawsuit was filed by a former Caremark quality assurance representative, who will receive $505,680 from the federal government’s share of the settlement proceeds.

For more information on this case, click here:

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Doctor Exposes Medicare Fraud With False Claims Act Lawsuit

A Tennessee doctor will share in the government’s recovery after filing a whistleblower lawsuit against a cardiologist who allegedly performed medically unnecessary cardiac stent placements.

Under the settlement, cardiologist Dr. Elie H. Korban will pay $1.15 million to resolve allegations that he placed unnecessary stents in Medicare and Medicaid patients.

For more information on this case, click here:

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