Applied ethics

A settlement has been reached in whistleblower class action lawsuits brought against Adventist Health System who is acccused of maintaining improper compensation arrangements with referring physicians and by miscoding claims.

The whistleblowers’ share of the settlement has not yet been determined. 

The allegations arose from two lawsuits, the first of which was filed in December 2012 and claimed that Adventist submitted false claims to the Medicare and Medicaid programs for services rendered to patients referred by employed physicians who received bonuses based on a formula that improperly took into account the value of the physicians’ referrals to Adventist hospitals.  Additionally, the settlement resolves allegations that Adventist submitted bills to Medicare for its employed physicians’ professional services containing certain improper coding modifiers, and thereby obtained greater reimbursement for these services than entitled.

A former city employee who claimed she was fired for acting as a whistleblower on official misconduct filed a complaint in April 2011.  Her specific accusations were that the city was in violation of New Jersey's Conscientious Employee Protection Act when it fired her for whistleblowing during her employment. The details of the settlement were not disclosed.

Between 1995 until her dismissal in 2011, the whistleblower served as the city's principal personnel clerk. She was barred from asserting several pieces of evidence if the case went to trial. The barred evidence included her claim the city fired her for cooperating with FBI agents conducting an investigation in 2005 during Operation Bid Rig.

Operation Bid Rig was the state's largest federal corruption sting, targeting dozens of politicians and officials in Monmouth and Ocean counties and elsewhere in the state.

A settlement has been reached in a whistleblower class action lawsuit brought against North Broward Hospital District who is accused of engaging in improper financial relationships with referring physicians.

The whistleblower will receive $12,045,655.51 from the recovery. 

The whistleblower case, filed in 2010, alleged that the hospital district provided compensation to nine employed physicians that exceeded the fair market value of their services.  The United States contended that these agreements violated the Stark Statute and the False Claims Act.  The Stark Statute restricts the financial relationships that hospitals may have with doctors who refer patients to them.

A settlement has been reached in a whistleblower class action lawsuit brought against The University of Medicine and Dentistry of New Jersey (UMDNJ) who is accused of defrauding Medicaid by submitting duplicate claims for payment.

The whistleblower will receive a $801,000 share of the total federal recovery.

The whistleblwoer case, filed in July 2004, alleged that From 1993 to 2004, UMDNJ’s University Hospital submitted claims to Medicaid for outpatient physician services that were also being billed by doctors working in the hospital’s outpatient centers. By submitting duplicate claims for payment, University Hospital effectively doubled billed the government’s Medicaid program.

A settlement has been reached in a whistleblower class action lawsuit brought against PAE Government Services Inc (PAE) and RM Asia (HK) Limited (RM Asia). They are accused of violating the False Claims Act by taking part in a bid-rigging scheme that resulted in false claims for payment under a U.S. Army contract for services in Afghanistan.

The whislteblower will receive a $261,000 share of the government's recovery.

The whistleblower case, filed in 2011, alleged that former managers of PAE and RM Asia funneled subcontracts paid for by the government to companies owned by the former managers and their relatives by using confidential bid information to ensure that their companies would beat out other, honest competitors.   

In a related criminal investigation, the U.S. Attorney’s Office of the Eastern District of Virginia previously obtained guilty pleas from former PAE program manager Keith Johnson; Johnson’s wife, Angela Gregory Johnson; and RM Asia’s former project manager, John Eisner, and deputy project manager, Jerry Kieffer, for their roles in the scheme.

A settlement has been reached in two whistleblower class action lawsuits brought against Kos Pharmaceuticals, a subsidiary of Abbott Laboratories, who is accused of paying illegal kickbacks to doctors, other medical professionals, physician groups and managed care organizations to get them to prescribe or recommend Niaspan and Advicor.

According to the agreement reached with the government, the Delaware-based company will pay more than $38 million to settle civil allegations under the False Claims Act and a $3.36 million criminal fine. The federal share of the civil settlement is $33,705,310 and the state Medicaid share is $4,454,432.The whistleblowers will receive payments totaling more than $6.4 million from the federal share of the civil recovery. 

The first of the two cases was filed in March 2004 and alleged that between January 2002 and June 2006, two doctors proposed that they would endorse the use of Kos products, including Advicor, for the treatment of cholesterol in exchange for a series of payments. During that time, one of the doctors wrote 4,130 prescriptions for Kos products. According to the court documents, some of those prescriptions were paid for by Medicare and Medicaid. From 2002 to 2004, Kos made a series of payments to the two doctors or a third party intermediary in the form of “sponsorship” of continuing medical education classes conducted by the doctors and purported speakers’ fees. 

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A settlement has been reached in a whistleblower class action lawsuit brought against Fluor Hanford LLC who is accused of using federal funds for lobbying.

The whistleblower will receive $200,000 of the government’s settlement.

The case, filed in February 2011, alleged that Fluor used Department of Energy (DOE) funds to lobby Congress and other federal officials to increase funding for the HAMMER Center, in violation of a federal law known as the Byrd Amendment, which prohibits the use of federal funds for lobbying.

Between 2005 and 2009, Fluor contracted with the DOE to manage and operate the Hazardous Materials Management and Emergency Response (HAMMER) Center. The HAMMER Center provides homeland security and emergency response training to first responders and law enforcement personnel.

A settlement has been reached in a whistleblower class action lawsuit brought against Science Applications International Corporation who is accused of charging inflated prices under grants to train first responder personnel to prevent and respond to terrorism attacks.

The whistleblower's share of the recovery has not been determined. 

The case, filed in February 2012, alleged that SAIC’s cost proposals falsely represented that SAIC would use far more expensive personnel to carry out its efforts than it intended to use and actually did use, resulting in inflated charges to the United States.

Between 2002 and 2012, the New Mexico Institute of Mining and Technology (New Mexico Tech) received six federal grants from the Department of Justice, the Department of Homeland Security, and the Federal Emergency Management Agency to train first responder personnel to prevent and respond to terrorism events involving explosive devices.  New Mexico Tech awarded subgrants to SAIC to provide course management, development, and instruction.

A settlement has been reached in a whistleblower class action lawsuit brought against Tennessee Orthopaedic Clinics PC and Appalachian Orthopaedic Clinics PC. They are accused of knowingly billing state and federal health care programs for reimported osteoarthritis medications, known as viscosupplements.

Tennessee Orthopaedic Clinics PC will pay $1.3 million, and Appalachian Orthopaedic Clinics PC will pay $550,000. The whistleblower will receive a $323,750 share of the recovery.

The case, filed in February 2012, alleged that the clinics knowingly purchased deeply discounted viscosupplements that were reimported from foreign countries and billed them to state and federal health care programs in order to profit from the reimbursement system, when such reimported viscosupplements were not reimbursable by those programs.  Allegedly, the reimported product included labeling in foreign languages and in English for additional uses not approved in the United States, which demonstrated that the product was reimported.  Moreover, because the product was reimported, the government alleged there was no manufacturer assurance that it had not been tampered with or that it was stored appropriately.   

A settlement has been reached in a whistleblower class action lawsuit brought against Frazier Masonry Corp, F-Y Inc, CTI Concrete & Masonry Inc, Masonry Technology Inc, Masonry Works Inc, Russell Frazier and Robert Yowell.  They are accused of misrepresenting their disadvantaged small business status in connection with military construction contracts.

The whistleblower will receive a $393,383 share of the recovery.

This settlement stems from other cases, the first of which was filed in 2012.  The United States alleged the defendant masonry subcontractors and their principals misrepresented to the prime contractors that they were small businesses, and that these misrepresentations caused the prime contractors to falsely certify that they had complied with the small business provisions of the contracts in claiming payment.  Russell Frazier previously pleaded guilty in related criminal proceedings to causing false statements.