Labor

A settlement has been reached in a whistleblower class action lawsuit brought against nine hospitals located in Alabama, Indiana, Florida, Michigan, South Carolina, New York and Minnesota. They are accused of submitting false claims to Medicare.

The settling facilities and the amount being paid by each to the United States are Ball Memorial Hospital, Muncie, Ind. ($1,995,431); Bethesda Memorial Hospital, Boynton Beach, Fla. ($356,079); Bloomington Hospital, Bloomington, Ind. ($1,443,848); Genesys Regional Medical Center, Grand Blanc, Mich. ($931,742); Huntsville Hospital, dba The Health Care Authority of the City of Huntsville, Huntsville, Ala. ($1,992,756); Palmetto Health dba Palmetto Health Baptist Hospital, Columbia, S.C. ($1,861,083.14); St. Elizabeth Medical Center, Utica, N.Y. ($195,976); St. Mary’s of Michigan Hospital, Saginaw, Mich. ($260,065.21); and United Hospital, St. Paul, Minn. ($428,656).  The whistleblowers will receive approximately $1.5 million as their share of the settlement proceeds.

The original whistleblower case was filed against multiple facilities and filed in 2008.  The United States specifically alleged that these nine hospitals overcharged Medicare between 2000 and 2008 when performing kyphoplasty, a minimally-invasive procedure used to treat certain spinal fractures that often are due to osteoporosis. In many cases, the procedure can be performed safely as a less costly out-patient procedure, but the government contends that the hospitals performed the procedure on an in-patient basis in order to increase their Medicare billings. 

The settlement with these facilities follows the settlements that the government reached in May and September 2009 with nine other hospitals for alleged kyphoplasty-related Medicare fraud claims, as well as the government’s May 2008 settlement with Medtronic Spine LLC, corporate successor to Kyphon Inc. Medtronic Spine paid $75 million to settle allegations that the company defrauded Medicare by counseling hospital providers to perform kyphoplasty procedures as an in-patient procedure, even though in many cases the minimally-invasive procedure should have been done on an out-patient basis.

A settlement has been reached to resolve False Claims Act allegations against Learning Tree International Inc who is accused of knowingly invoicing federal agencies for training courses that were not provided.

The settlement resolves allegations that Learning Tree knowingly invoiced federal agencies in advance for multi-course training packages before employees of the purchasing agencies had attended the full number of courses available under each. The government further alleged that upon expiration of the training packages, Learning Tree retained federal funds that the company received in connection with unused courses without providing a refund or credit. As a result, Learning Tree received federal funds for training courses that were not, in fact, provided.

A settlement has been reached in two whistleblower class action lawsuits brought against Schwarz Pharma Inc who is accused of causing false claims to be submitted to federal health care programs.

The federal share of the settlement is $12,243,836 and the state Medicaid share is $9,756,164. The two whistleblowers will receive a total of $1,836,575 from the federal share and additional amounts from the state share.

The United States allegations were in reference to Schwarz Pharama Inc's drugs, Deponit and Hyoscyamine Sulfate Extended Release (Hyoscyamine Sulfate ER). 

Deponit is a nitroglycerin skin patch that has been used to prevent angina. Hyoscyamine Sulfate ER is an antispasmodic medication that has been used to treat various stomach, intestinal, and urinary tract disorders that involve cramps, colic, or other painful muscle contractions. While the active ingredients in Deponit and Hyoscyamine Sulfate ER had been in products on the market for many years, the Food and Drug Administration made determinations in 1997 and 1999 that resulted in the drugs being ineligible for reimbursement by government health care programs such as Medicaid.

The United States alleged that Schwarz misrepresented the regulatory status of both drugs and failed to advise CMS that these unapproved drugs did not qualify for coverage under federal health care programs. As a result, the government contends, Schwarz knowingly caused false claims to be submitted for Deponit and Hyoscyamine Sulfate ER. Ultimately, neither Deponit nor Hyoscyamine Sulfate ER ever received full regulatory approval for safety and effectiveness, and neither product is currently on the market.

A settlement has been reached in a whistleblower class action lawsuit brought against Alpharma Inc who is accused of paing health care providers to induce them to promote or prescribe their drug, Kadian.

According to the settllement, the United States will receive $33.6 million to resolve the federal claims and the states will receive approximately $8.9 million to settle their respective claims. The whistleblower will receive $5.33 million out of the federal share of the recovery.

The original case was filed in September of 2006.  The United States alleged that, between January 1, 2000 and December 29, 2008, Alpharma paid health care providers to induce them to promote or prescribe Kadian, and made misrepresentations about the safety and efficacy of the drug, which is used to treat chronic moderate to severe pain. A

A settlement has been reached in a whistleblower class action lawsuit brought against Robert Wood Johnson University Hospital Hamilton fraudulently inflating its charges to Medicare. 

Whistleblowers that filed two lawsuits that these allegations are based upon will receive $1,111,250 of the total recovery.

The first of the lawsuits was filed in November 2002. The United States alleged that the hospital inflated its charges to obtain supplemental outlier payments for cases that were not extraordinarily costly and for which outlier payments should not have been paid. The United States intervened in both lawsuits in January 2008. 

In addition to its standard payment system, Medicare provides supplemental reimbursement, called "outlier payments," to hospitals and other health care providers in cases where the cost of care is unusually high. Congress enacted the supplemental outlier payments system to ensure that hospitals have the incentive to treat inpatients whose care requires unusually high costs.

A settlement has been reached in a whistleblower class action lawsuit brought against Dr. Todd J. Scarbrough and Melbourne Internal Medicine Associates P.A. (MIMA), who are accused of submitting false claims to Medicare and the military’s health care program - TRICARE.

The whistleblower will receive $2.64 million of the settlement.

The case was originally filed in July 2008.  The United States alleged MIMA Cancer Center had defrauded the federal health care programs by improperly inflating claims through various schemes specifically designed to cloak the fraudulent practices. In particular, the MIMA Cancer Center billed for services not supervised, duplicate and unnecessary services, services not rendered and upcoded services - a practice in which provider services are billed for higher procedure codes than were actually performed. The United States’ investigation found that MIMA executives had knowledge of a substantial number of the fraudulent billing practices at the facility, but had failed to stop the fraudulent billing.

A settlement has been reached in a whistleblower class action lawsuit brought against Atricure Inc who is accused of submitting false and fraudulent claims for Medicare reimbursement.

The whistleblower that filed this lawsuit will receive a total of $625,000.

The case was originally filed in 2007.  The United States alleged that Atricure marketed its medical devices to treat atrial fibrillation (the most common cardiac arrhythmia or abnormal heart rhythm), a use that is not approved by the U.S. Food and Drug Administration (FDA). Atricure also allegedly promoted expensive heart surgery using the company’s devices when less invasive alternatives were appropriate, advised hospitals to up-code surgical procedures using the company’s devices to inflate Medicare reimbursement, and paid kickbacks to health care providers to use its devices. The United States asserted that by engaging in this conduct, Atricure knowingly violated the Food, Drug, and Cosmetic Act and caused the submission of false and fraudulent claims in violation of the False Claims Act.

A settlement has been reached in a whistleblower class action lawsuit brought against Eon Labs Inc who is accused of submitting false quarterly reports to the government. 

The settlement resolves allegations against Eon in a multi-defendant whistleblower action. The whistleblower will receive approximately $525,000 in relation to this particular settlement.

The originally filed lawsuit originated in 2002.  The United States alleged that, from April 1999, and continuing through September 2008, Eon submitted false quarterly reports to the government that misrepresented Nitroglycerin SR's regulatory status and failed to advise that Nitroglycerin SR no longer qualified for Medicaid coverage. As a result, the government contends, Eon knowingly caused false Medicaid claims to be submitted for Nitroglycerin SR.

In April 1999, the Food & Drug Administration (FDA) determined that Nitroglycerin SR lacked substantial evidence of effectiveness and published a notice proposing to withdraw approval of the product. The government contends that, after the FDA notice, Nitroglycerin SR no longer was legally eligible for reimbursement by government health care programs such as Medicaid.

A settlement has been reached in a whistleblower class action lawsuit brought against Atlanta-based Mariner Health Care Inc. and SavaSeniorCare Administrative Services LLC, as well as their principals, Leonard Grunstein, Murray Forman and Rubin Schron. They are accused of soliciting kickback payments from Omnicare in exchange for agreements to continue using Omnicare.

$7.84 million of the settlement proceeds will go to the United States, while $6.16 million has been allocated to certain state Medicaid programs. The whistleblower's recovery was not disclosed.

The case was originally filed in 2006.  The United States alleged the defendants conspired to arrange for Omnicare to pay Mariner and Sava $50 million in exchange for the right to continue providing pharmacy services to the nursing homes, which together constituted one of Omnicare’s largest customers. The parties allegedly attempted to disguise the $50 million kickback as a payment to acquire a small Mariner business unit that had only two employees and was worth far less than $50 million. According to the complaint, Omnicare paid $40 million of this amount prior to actually acquiring the Mariner business unit and, at the same time, Omnicare obtained new 15-year pharmacy contracts from Mariner and from Sava, a new nursing home chain that Grunstein and Forman created from the Mariner chain. The complaint alleged that Grunstein and Forman illegally tied the new pharmacy contracts to Omnicare’s agreement to purchase the small Mariner business unit, and that the total $50 million purchase price for the business unit actually was a kickback by Omnicare to keep the future business of Mariner and Sava.

The government’s complaint further alleged that, in 2006, after the government issued subpoenas concerning the transaction, the individual defendants created backdated documents in a further attempt to hide the kickback.

A settlement has been reached in a whistleblower class action lawsuit brought against two New Jersey hospitals,Our Lady of Lourdes Medical Center (OLL) in Camden, N.J., and Lourdes Medical Center of Burlington County (LMC) in Willingboro, N.J. They are accused of fraudulently inflating charges to Medicare.

The whistleblower will receive $356,000, plus interest.

Originally filed in 2005, The United States alleged that LMC fraudulently inflated its charges to Medicare patients to obtain enhanced reimbursement from Medicare. In addition to its standard payment system, Medicare provides supplemental reimbursement, called "outlier payments," to hospitals and other health care providers in cases where the cost of care is unusually high. Congress enacted the supplemental outlier payments system to give hospitals the incentive to treat inpatients whose care requires unusually high costs. The lawsuit alleged that the hospital inflated its charges to obtain supplemental outlier payments for cases that were not extraordinarily costly and for which outlier payments should not have been paid.

The United States conducted a separate investigation of OLL. The government alleged, as a result of that investigation, that the hospital also wrongfully obtained excessive outlier payments.