Healthcare Fraud

Two former Bozeman radiologists file whistleblower lawsuit

Two former radiologists file whistleblower lawsuit against Bozeman Health Deaconess Hospital.

The allegations arose by a lawsuit claiming Bozeman Health Deaconess Hospital of illegally conspiring to maintain its monopoly on radiology services, leading to fraudulent bills being submitted to Medicare and Medicaid.

Mr. Rembert and Mr. Paradise allege the radiology group that had contracted with the Bozeman hospital was considering opening an outpatient imaging center, which would have competed with the hospital for patients and possibly offered services at a lower cost. Allegedly, the hospital formed a joint venture with the radiology group and agreed to refer patients to the joint venture in exchange for millions of dollars in kickbacks.

The hospital's partnership with Intercity Radiology included a clause that prevented its employees from participating in any other outpatient imaging center.

The scheme resulted in millions of dollars in fraudulent claims.

The Bozeman Daily Chronicle reported that the Hospital attorney Ian McIntosh denied the allegations and said the hospital will defend itself against the lawsuit.

Company: 
Bozeman Health Deaconess Hospital

$5.9 Million Settlement reached to resolve False Claims Act Allegations against Yavapai Regional Medical Center

Settlement Amount: 
$5,900,000

A settlement reached to resolve False Claims Act Allegations against Yavapai Regional Medical Center.

The allegations arose by a lawsuit claiming Yavapai Regional Medical Center inflated Medicare payments by incorrectly reporting the amount of hour's hospital employees worked.

On October 4, 2016, the U.S. attorney for Arizona stated that the hospital misreported the average hourly wages it paid employees from 2006 through 2009. Those higher hourly wages prompted Medicare to pay the hospital artificially high reimbursement rates based on an index that took into account many factors including hospital wages.

"Falsifying records and extracting unwarranted funds from Medicare will be detected and stopped," said Christian J. Schrank, Special Agent in Charge for the Los Angeles Region of the United States Department of Health and Human Services, Office of Inspector General. "Medicare funds are intended to care for patients, not line the pockets of providers who submit false claims."

As a result of Yavapai's false claims, federal health care programs paid substantially more than was warranted.

"As soon as we knew of this allegation on July 20, 2016, we immediately took action and, working collaboratively with the federal government, we were able to quickly reach an agreement in principle to resolve the issue," said Robbie Nicol, a hospital spokeswoman.

The whistleblowers' share of the settlement will be approximately $1.17 million. 

Sort Amount: 
5900000.00
Company: 
Yavapai Regional Medical Center

$2.39 Million Settlement reached to resolve False Claims Act Allegations against three orthopedic clinics

Settlement Amount: 
$2,390,000

A settlement reached to resolve False Claims Act Allegations against Orthopedic Associates of Northern California; San Bernardino Medical Orthopaedic Group, DBA Arrowhead Orthopaedics and Reno Orthopaedic Clinic.

The allegations arose by a lawsuit claiming the three orthopedic clinics knowingly billed federal and state health care programs for re-imported osteoarthritis medications, known as viscosupplements.

Allegedly, the clinics bought discounted viscosupplements that were re-imported from foreign countries. The clinics then billed state and federal healthcare programs for reimbursements, even though the re-imported viscosupplements did not qualify as reimbursable. According, to the federal government the products were re-imported, therefore they could have been altered or stored inappropriately.

Orthopedic Associates of Northern California, located in Chico, will pay $815,794; San Bernardino Medical Orthopaedic Group Inc., DBA Arrowhead Orthopaedics, headquartered in Redlands, California, will pay $971,903; and Reno Orthopaedic Clinic, headquartered in Reno, Nevada, will pay $602,335.

The whistleblowers' share of the settlement will be approximately $430,000. 

Sort Amount: 
2390000.00
Company: 
Three Orthopedic Clinics

$12 Million Settlement reached to resolve False Claims Act Allegations against Diabetic Medical Equipment Companies

Settlement Amount: 
$12,000,000

A settlement reached to resolve False Claims Act Allegations against U.S. Healthcare Supply LLC and Oxford Diabetic Supply Inc and the two owners and presidents of those companies.

The allegations arose by a lawsuit claiming U.S. Healthcare Supply LLC and Oxford Diabetic Supply Inc and the two owners and presidents of those companies violated the federal False Claims Act by using a fictitious entity to make unsolicited telephone calls to Medicare beneficiaries in order to sell them durable medical equipment.

According to Department of Justice,  U.S. Healthcare Supply LLC and Oxford Diabetic Supply Inc set up and controlled an entity called Diabetic Experts Inc, which they used to make unsolicited telephone calls to Medicare beneficiaries in order to sell them durable medical equipment.  The companies submitted claims to Medicare for the equipment that they sold based on these unsolicited calls. 

“Cold-calling people to sell them expensive medical equipment is prohibited for a reason: unsuspecting patients shouldn’t be coerced into making medical decisions about devices and equipment – which they may not even need – on the basis of a sales pitch,” said U.S. Attorney Paul J. Fishman for the District of New Jersey.

U.S. Healthcare Supply LLC has agreed to pay more than $5 million, and Jon P. Letko, its owner and president, has agreed to pay more than $1 million. The owner and president of Oxford Diabetic Supply Inc, Edward J. Letko, has agreed to pay $6 million plus interest.

Sort Amount: 
12000000.00
Company: 
U.S. Healthcare Supply LLC and Oxford Diabetic Supply Inc

$28.5 Million Settlement reached to resolve False Claims Act Allegations against North American Health Care Inc

Settlement Amount: 
$28,500,000

A settlement reached to resolve False Claims Act Allegations against North American Health Care Inc, its chairman of the board, John Sorenson, and its senior vice president of Reimbursement Analysis, Margaret Gelvezon.

The allegations arose from a lawsuit claiming North American Health Care Inc; Mr. Sorensen and Ms. Gelvezon violated the False Claims Act by causing the submission of false claims to government health care programs for medically unnecessary rehabilitation therapy services provided to residents at North American Health Care’s skilled nursing facilities.

North American Health Care has agreed to pay $28.5 million, Mr. Sorensen has agreed to pay $1 million and Ms. Gelvezon has agreed to pay $500,000.

According to the Justice Department, North American Health Care caused false claims to be submitted to Medicare and TRICARE, and Ms. Gelvezon, in her capacity as an officer of North American Health Care, contributed to this conduct by creating the improper billing scheme and Mr. Sorensen, in his capacity as chairman of the board of North American Health Care, reinforced this scheme at the North American Health Care facilities. 

Allegedly, this conduct occurred during the period from January 21, 2005, to October 31, 2009, for all of the North American Health Care skilled nursing facilities and continued during the period of November 1, 2009, to December 3, 2011, for three of the skilled nursing facilities in the Northern District of California area.

“Today’s settlement should send a message to others who may be engaging in these schemes that we will pursue justice for our beneficiaries and the programs.” stated Department of Health and Human Services-Office of the Inspector General Special Agent in Charge Steven Ryan.

North American Health Care has also entered into a five-year Corporate Integrity Agreement with the department of Health and Human Services-Office of the Inspector General as part of the settlement agreement.

Sort Amount: 
28500000.00
Company: 
North American Health Care Inc

$3.3 Million Won by Progenics Pharmaceuticals Whistleblower

Settlement Amount: 
$3,300,000

On August 30, 2016, a former Progenics Pharmaceuticals Inc chemist who won a $1.66 million last year alleging a biotechnology company of retaliating against him for whistleblower claims was awarded approximately another $3.3 million.

Mr. Perez claimed he was fired in 2008 after alleging that the company defrauded shareholders by falsely claiming a newly tested drug was effective. The full amount of the verdict awarded to Mr. Perez was for compensatory damages. Mr. Perez, had asked U.S. District Judge in Manhattan to order Progenics to reinstate him.

Progenics Pharmaceuticals Inc is a biopharmaceutical company concentrating on research and development for biotechnology product candidates in oncology, virology, supportive care and gastroenterology. 

Sort Amount: 
3300000.00
Company: 
Progenics Pharmaceuticals

$18 Million Settlement reached to resolve False Claims Act Allegations against Johnson & Johnson Subsidiary Acclarent Inc

Settlement Amount: 
$18,000,000

A settlement reached to resolve False Claims Act Allegations against Johnson & Johnson Subsidiary Acclarent Inc.

The whistleblowers' share of the settlement will be approximately $3.5 million.

The allegations arose by a lawsuit claiming Acclarent Inc, caused health care providers to submit false claims to Medicare and other federal health care programs by marketing and distributing its sinus spacer product for use as a drug delivery device without U.S. Food and Drug Administration approval of that use.

On July 22, 2016, the Justice Department announced, that Acclarent sold a variety of medical devices used in sinus surgeries, including a device known as the Relieva Stratus MicroFlow Spacer (Stratus).  In 2006, Acclarent received FDA clearance to market the Stratus as a spacer to be used only with saline to maintain sinus openings following surgery.  Allegedly, Acclarent intended for the Stratus to be used instead as a drug-delivery device for prescription corticosteroids, including Kenalog-40, and that the device was specifically designed and engineered for this use.    

Also, Acclarent allegedly marketed the Stratus as a drug delivery device even after the FDA rejected the company’s 2007 request to expand the approved uses for the Stratus.

Acclarent added a warning to its label regarding use of active drug substances in the Stratus in 2010, but continued to market the Stratus for drug delivery.  By May 2013, Acclarent discontinued all sales of the Stratus and the company agreed to withdraw all FDA marketing clearances for the device.

On July 20th 2016, Acclarent’s former CEO and former Vice President of Sales were convicted of 10 misdemeanor counts of introducing adulterated and misbranded medical devices into interstate commerce.

Sort Amount: 
18000000.00
Company: 
Acclarent Inc

$17 Million Settlement reached to resolve False Claims Act Allegations against Lexington Medical Center

Settlement Amount: 
$17,000,000

A settlement reached to resolve False Claims Act Allegations against Lexington Medical Center.

The allegations arose by a lawsuit claiming Lexington Medical Center violated the Physician Self-Referral Law (the Stark Law) and the False Claims Act by maintaining improper financial arrangements with 28 physicians.

On July 28, 2016, the Department of Justice announced, that Lexington Medical Center entered into asset purchase agreements for the acquisition of physician practices or employment agreements with 28 physicians that violated the Stark Law because they took into account the volume or value of physician referrals, were not commercially reasonable or provided compensation in excess of fair market value.

As part of the settlement, Lexington Medical Center will enter into a Corporate Integrity Agreement with the Department of Health and Human Services-Office of the Inspector General that requires Lexington Medical Center to implement measures designed to avoid or promptly detect future conduct similar to that which gave rise to this settlement.

The whistleblowers' share of the settlement will be approximately $4.5 million. 

Sort Amount: 
17000000.00
Company: 
Lexington Medical Center

$21.5 Million Settlement reached to resolve False Claims Act Allegations against MD2U Holding Company

Settlement Amount: 
$21,511,756

A settlement has been reached to resolve False Claims Act Allegations against MD2U Holding Company.

The allegations arose by a lawsuit claiming MD2U Holding Company intentionally submitted false medical claims to Medicare and other government health care programs, altered records to support false claims and provided services that were medically unnecessary.

According to the government’s complaint, between July 1, 2007, and Nov. 30, 2014, MD2U submitted false billings for patients who were neither homebound nor home-limited; improperly billed the government for medically unnecessary visits; billed government health care programs at the highest payment codes; and cloned medical records in order to justify patient visits.

“This provider billed for medically unnecessary home visits and often grossly exaggerated the level of service provided,” said Special Agent in Charge Derrick L. Jackson for the U.S. Department of Health and Human Services’ Office of Inspector General (HHS-OIG) in Atlanta.

MD2U Holding Company and its President and CEO J. Michael Benfield, Chief Information Officer Greg Latta and Chief Operations Officer Karen Latta can fulfill their obligations to pay the consent judgment by paying $3.3 million and a percentage of MD2U’s net income throughout the next five years. Additionally, MD2U Holding Company and its owners have agreed to enter into a five-year corporate integrity agreement with the U.S. Department of Health and Human Services’ Office of Inspector General.

Sort Amount: 
21511800.00
Company: 
MD2U Holding Company

Charges against 301 Individuals for Submitting $900 Million in Fraudulent Health Claims

On June 22, 2016, the Justice Department announced it had charged a record 301 people with schemes that defrauded government health programs by submitting $900 million in fraudulent health claims. A nationwide sweep led by the Medicare Fraud Strike Force in 36 federal districts, resulting in criminal and civil charges against doctors, nurses and other licensed medical professionals, for their alleged participation in health care fraud schemes.

The defendants are charged with numerous healthcare fraud-related crimes, including conspiracy to commit healthcare fraud, violations of the anti-kickback statutes, money laundering and aggravated identity theft. The charges are based on a variety of alleged fraud schemes involving various medical treatments and services, including home health care, psychotherapy, physical and occupational therapy, durable medical equipment and prescription drugs.

It's the largest takedown in history, both in terms of the number of people charged and the loss amount.

The Medicare Fraud Strike Force swept through territories that included that state of Florida, Texas, California, Michigan, Illinois, New York, and Louisiana.

Sort Amount: 
900000000.00

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