C.R. Bard Inc. has agreed to pay $48.26 million to resolve allegations that it knowingly caused false claims to be submitted to the Medicare program for brachytherapy seeds used to treat prostate cancer in violation of the False Claims Act.
This case was initiated by a former Bard manager, who alleged that Bard improperly provided compensation to customers and physicians to induce them to purchase Bard’s seeds, in violation of the Anti-Kickback Statute. The illegal payments allegedly took the form of certain grants, guaranteed minimum rebates, conference fees, marketing assistance and free medical equipment that Bard paid to customers and physicians who used the seeds to perform treatment for prostate cancer. Hospitals ultimately submitted bills to Medicare for these seeds, which the government alleged were rendered false by Bard’s illegal kickback activity. The government alleged that Bard was liable under the False Claims Act for causing the submission of those false claims.
Pursuant to the qui tam provisions of the False Claims Act, the whistleblower who filed the lawsuit will receive $10,134,600 as her share of the civil settlement.
For more information on this case, click here: http://www.justice.gov/opa/pr/2013/May/13-civ-547.html
Ranbaxy USA Inc., a subsidiary of Indian generic pharmaceutical manufacturer Ranbaxy Laboratories Limited, pleaded guilty to charges relating to the manufacture and distribution of adulterated drugs made at two of its facilities. In addition to its guilty plea, Ranbaxy agreed to pay a criminal fine and forfeiture of $150 million, and also will pay another $350 million to resolve civil claims under the False Claims Act.
The whistleblower who initiated the lawsuit was a former Ranbaxy executive. According to the allegations he raised, Ranbaxy committed wide-ranging manufacturing violations in its facilities in India and the United States, including inadequate testing to ensure that the drugs were safe, effective, free of cross-contamination, and manufactured in compliance with their approved specifications. The whistleblower also alleged that Ranbaxy falsified information about the drugs, including backdating tests and submitting false data where no tests were performed. As a result of these practices, dozens of adulterated generic drugs were purchased by government healthcare programs such as Medicare and Medicaid.
As a reward for exposing Raxbury’s conduct through the filing of a False Claims Act lawsuit, the whistleblower will receive $48.6 million out of the federal government’s recovery.
For more information on this case, click here: http://www.justice.gov/opa/pr/2013/May/13-civ-542.html
In a settlement recently announced by the Department of Justice, Adventist Health System/West, d/b/a Adventist Health, and White Memorial Medical Center have agreed to pay the United States and the State of California $14.1 million to resolve allegations raised in a False Claims Act case. The whistleblowers who filed the lawsuit will receive $2,839,219 as their share of the recovery.
The claims in this case relate to alleged violations of the Anti-Kickback Act, which prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid and/or other federally-funded programs. These violations included claims that Adventist Health improperly compensated physicians who referred patients to the White Memorial facility. The government also alleged that the defendants violated the Stark Law, which forbids hospitals from submitting claims for patient referrals made by a physician with whom the hospital has an improper financial arrangement.
The Department of Justice continues to aggressively pursue False Claims Act lawsuits involving violations of the Anti-Kickback Statute and the Stark Law, which are intended to ensure that a physician’s medical judgment 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: http://www.justice.gov/opa/pr/2013/May/13-civ-507.html
The Office of Inspector General (“OIG”) of the United States Department of Health and Human Services recently updated its Provider Self-Disclosure Protocol, which establishes a procedure for health providers to voluntarily disclose instances of potential fraud involving federal health care programs. Originally published in 1998, this process has resulted in the recovery of over $280 million for the benefit of U.S. taxpayers.
After analyzing the procedure and receiving input from the health care community regarding ways it could be improved, OIG has chosen to revise the Self-Disclosure Protocol in its entirety.
In announcing the revised Self-Disclosure Protocol, OIG emphasized that members of the health care industry have a legal and ethical duty to act with integrity when dealing with the federal health care programs. This duty includes an obligation to take appropriate steps to detect and prevent fraudulent and abusive activities, to implement specific procedures and mechanisms to investigate and resolve instances of potential fraud involving the federal health care programs, and to make full disclosure to the appropriate authorities.
Providers who disclose potential fraud and cooperate with OIG’s investigation are usually not required to adopt integrity agreement obligations, in large part because OIG considers these good faith disclosures to be indications of an effective compliance program. Additionally, providers who voluntarily disclose these issues typically pay less in civil penalties than those who remain silent until the government initiates an investigation.
For more information on the new Self-Disclosure Protocol, click here:
Amgen Inc. has agreed to pay $24.9 million to resolve a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act. The allegations in this case relate to Amgen’s business practices concerning the sale of Aranesp, a pharmaceutical product.
Based on information provided by the whistleblower, the government contended that Amgen paid kickbacks to long-term care pharmacy providers Omnicare Inc., PharMerica Corporation and Kindred Healthcare Inc. in return for implementing “therapeutic interchange” programs that were designed to switch Medicare and Medicaid beneficiaries from a competitor drug to Aranesp. The government alleged that the kickbacks took the form of performance-based rebates that were tied to market-share or volume thresholds. The government further alleged that, as part of the therapeutic interchange program, Amgen distributed materials to consultant pharmacists and nursing home staff encouraging the use of Aranesp for patients who did not have anemia associated with chronic renal failure.
For more information on this case, click here: http://www.justice.gov/opa/pr/2013/April/13-civ-438.html
The Office of Inspector General for the Department of Health and Human Services (“OIG”) recently issued a Special Fraud Alert addressing physician-owned entities that derive revenue from the sale of implantable medical devices ordered by their physician-owners for use in procedures the physician-owners perform on their own patients at hospitals or ambulatory surgical centers. According to OIG, certain aspects of these physician-owned distributorships (“POD”) “produce substantial fraud and abuse risk and pose dangers to patient safety.”
The concern described in the Special Fraud Alert relates to potential violations of the federal anti-kickback statute that occur “when remuneration is paid purposefully to induce or reward referrals of items or services payable by a Federal health care program.”
As described by OIG, longstanding guidance “makes clear that the opportunity for a referring physician to earn a profit, including through an investment in an entity for which he or she generates business, could constitute illegal remuneration under the anti-kickback statute. The anti-kickback statute is violated if even one purpose of the remuneration is to induce such referrals.”
Whether a particular POD violates the anti-kickback statute depends on the intent of the parties. However, OIG considers PODs to be “inherently suspect under the anti-kickback statute,” particularly those that contain any of these characteristics:
- The size of the investment offered to each physician varies with the expected or actual volume or value of devices used by the physician.
- Distributions are not made in proportion to ownership interest, or physician-owners pay different prices for their ownership interests, because of the expected or actual volume or value of devices used by the physicians.
- Physician-owners condition their referrals to hospitals or ASCs on their purchase of the POD’s devices through coercion or promises, for example, by stating or implying they will perform surgeries or refer patients elsewhere if a hospital or an ASC does not purchase devices from the POD, by promising or implying they will move surgeries to the hospital or ASC if it purchases devices from the POD, or by requiring a hospital or an ASC to enter into an exclusive purchase arrangement with the POD.
- Physician-owners are required, pressured, or actively encouraged to refer, recommend, or arrange for the purchase of the devices sold by the POD or, conversely, are threatened with, or experience, negative repercussions (e.g., decreased distributions, required divestiture) for failing to use the POD’s devices for their patients.
- The POD retains the right to repurchase a physician-owner’s interest for the physician’s failure or inability (through relocation, retirement, or otherwise) to refer, recommend, or arrange for the purchase of the POD’s devices.
- The POD is a shell entity that does not conduct appropriate product evaluations, maintain or manage sufficient inventory in its own facility, or employ or otherwise contract with personnel necessary for operations.
- The POD does not maintain continuous oversight of all distribution functions.
- When a hospital or an ASC requires physicians to disclose conflicts of interest, the POD’s physician-owners either fail to inform the hospital or ASC of, or actively conceal through misrepresentations, their ownership interest in the POD.
The Special Fraud Alert specifically states that the list above is not intended to be exhaustive, and that other characteristics “may increase the risk of fraud and abuse associated with a particular POD or provide evidence of unlawful intent.” Moreover, OIG emphasized that the anti-kickback statute proscribes conduct on both sides of an illegal transaction, noting that hospitals and ambulatory surgical centers that enter into arrangements with PODs may also be subject to liability.
For more information on this Special Fraud Alert, click here:
A former employee of Fluor Hanford LLC will receive $200,000 for filing a False Claims Act lawsuit that revealed Fluor’s improper use of federal funds for lobbying purposes.
Fluor Hanford LLC, a Department of Energy (“DOE”) contractor, agreed to pay $1.1 million to resolve allegations that it used DOE funds to lobby Congress and other federal officials to increase funding for the Hazardous Materials Management and Emergency Response Center. Federal law prohibits the use of federal funds for lobbying.
For more information on this case, click here: http://www.justice.gov/opa/pr/2013/April/13-civ-379.html
A former sales representative will receive $1,585,892.56 as his share of the recovery obtained by the government in a False Claims Act lawsuit.
CDW-Government LLC agreed to pay $5.66 million to resolve the whistleblower’s allegations in this case that it improperly charged government purchasers for shipping, sold products to the United States that were manufactured in China and other countries that are prohibited by the Trade Agreements Act, and underreported sales in order to avoid paying the U.S. General Services Administration its “Industrial Funding Fee,” a fee based on total contract sales that is designed to cover GSA’s costs of contract administration.
In addition to the statutory award, the whistleblower may be entitled to receive additional amounts for attorneys’ fees and costs.
For more information on this case, click here: http://www.justice.gov/opa/pr/2013/March/13-civ-360.html
A former employee of Hospice of Arizona L.C. will receive $1.8 million as a reward for filing a whistleblower lawsuit that exposed improper Medicare billing practices.
To resolve allegations asserted in this False Claims Act case, Hospice of Arizona L.C., American Hospice Management LLC, and American Hospice Management Holdings LLC have agreed to pay $12 million for allegedly billing Medicare for ineligible hospice services.
Under Medicare rules, the hospice benefit is available for patients who have a life expectancy of six months or less if their disease runs its normal course. The whistleblower in this case alleged
that the defendants pressured staff to find more patients eligible for Medicare, adopted procedures that delayed and discouraged staff from discharging patients from hospice when they were no longer appropriate for such services, and did not implement an adequate compliance program that might have addressed these problems.
For more information on this case, click here: http://www.justice.gov/opa/pr/2013/March/13-civ-326.html
Nursing home manager Grace Healthcare LLC and its affiliate Grace Ancillary Services LLC have agreed to pay $2.7 million to resolve allegations that they submitted false claims to Medicare and TennCare for medically unreasonable and unnecessary rehabilitation therapy. The subject therapy was provided in skilled nursing facilities located in Tennessee and elsewhere.
According to the lawsuit, the defendants pressured therapists to increase the amount of therapy provided to Medicare patients in order to meet revenue targets that were established without regard to patients’ individual therapy needs.
As a reward for initiating this False Claims Act case, the Tennessee whistleblower will receive $405,000.
For more information on this case, click here: http://www.justice.gov/opa/pr/2013/March/13-civ-290.html