Applied ethics

A settlement has been reached in a whistleblower class action lawsuit brought against Hencorp Becstone Capital LC  who is accused of making false statements and claims to the Export-Import Bank of the United States (Ex-Im Bank) in order to obtain loan guarantees.

The whistleblowers will receive $608,000 of the settlement. 

The case, filed in February 2013, alleged that Ricardo Maza, a Peruvian-based former Hencorp business agent, created false documentation to obtain Ex-Im Bank guarantees on fictitious transactions on which no products were sold or exported, and that Hencorp acted recklessly by outsourcing key credit review functions to Maza without adequate supervision or oversight.  The government alleged that Maza then diverted the proceeds of the loans to himself and to his friends and business associates in Peru, and that the transactions resulted in losses to the Ex-Im Bank when the loans were not repaid.  In 2012, Mario Mimbella, 64, of Miami, Florida, the purported U.S.-based exporter on three of the fraudulent transactions, pled guilty to making false records for his participation in the scheme and was later sentenced to prison.

A settlement has been reached in a whistleblower class action lawsuit brought against US Investigations Services Inc (USIS) and its parent company, Altegrity, who are accused of failing to perform required quality control reviews in connection withbackground investigations that USIS held with the U.S. Office of Personnel Management (OPM).

According to the settlement details, the companies have agreed to forgo their right to collect payments that they claim were owed by OPM, valued at least at $30 million, in exchange for a release of liability under the False Claims Act.  

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

The case, originally filed in July 2011, alleged that beginning in at least March 2008 and continuing through at least September 2012, USIS deliberately circumvented contractually required quality reviews of completed background investigations in order to increase the company’s revenues and profits.  Specifically, USIS allegedly devised a practice referred to internally as “dumping” or “flushing,” which involved releasing cases to OPM and representing them as complete when, in fact, not all the reports of investigations comprising those cases had received a contractually-required quality review.  The government contended that, relying upon USIS’ false representations, OPM issued payments and contract incentives to USIS that it would not otherwise have issued had OPM been aware that the background investigations had not gone through the quality review process required by the contracts.

A settlement has been reached in a whistleblower class action lawsuit brought against Jackson-Madison County General Hospital who is accused of overbilling Medicare and Medicaid for certain cardiac procedures.

The whistleblower's portion of the settlement was not disclosed.

The lawsuit, filed in 2007, alleged that Jackson-Madison County General Hospital placed cardiac stents in patients when the procedure was not required, together with other cardiac procedures that were deemed not medically necessary. The hospital, according to allegations stemming from an investigation and a whistleblower healthcare fraud lawsuit, then billed Medicare and Medicaid.

A settlement has been reached in a whistleblower class action lawsuit brought against CDI Corporation who is accused of charging the military for work not actually performed. 

Under the terms of the settlement, the whistleblower will receive $360,750.

The whistleblower cae was originally filed in 2005. The United States alleged that CDI wrongfully charged labor costs to work orders under military aircraft engine contracts for The General Electric Company (GE). The civil investigation examined CDI’s labor and billing records from Jan. 15, 2001, to Dec. 31, 2006. The civil investigation found that during this time period, CDI directed the mischarging of employees’ labor costs to purchase orders that would be reimbursed by the U.S. military. In fact, the employees did not perform the work billed to those military projects. CDI entered these mischarged labor costs in increments of 0.5 hours or less to evade detection.

A settlement has been reached in a whistleblower class action lawsuit brought against El Centro Regional Medical Center who is accused of defrauding Medicare.

The whistleblower will receive $375,000.

The original lawsuit was filed in May 2006. The United States alleged that the 165-bed acute care hospital fraudulently inflated its charges to Medicare patients to obtain larger reimbursements from the federal health care program. The settlement covers claims submitted by the hospital for short inpatient admissions, usually of one day or less, when the services should have been billed on an outpatient “observation” basis or as emergency room visits.

A settlement has been reached in a whistleblower class action lawsuit brought against St. Jude Medical Inc, Parma Community General Hospital, and Norton Healthcare. They are accused of violating the False Claims Act in relation to certain illegal kickbacks to secure heart-device business.

Under the terms of the settlement, St. Jude, headquartered in St. Paul, Minn., will pay $3,725,000. Parma Community General Hospital, located in Parma, Ohio, will pay $40,000, and Norton Healthcare in Louisville, Ky., will pay $133,300. The government asserted that Parma and Norton were recipients of improper rebates from St. Jude.  The reward for the whistleblower will be $640,050.

The whistleblower case was originally filed in 2006. The United States alleged that St. Jude paid illegal kickbacks to two hospitals to secure heart-device business and that these kickbacks caused false claims to be submitted to federal health care programs in violation of the False Claims Act. The kickbacks included alleged rebates that were "retroactive" and paid based on a hospital’s previous purchases of St. Jude heart-device equipment and rebates that St. Jude paid for purchases of heart-device equipment sold by its competitors to induce purchases of similar equipment from St. Jude in the future.

A settlement has been reached in a whistleblower class action lawsuit brought against The Health Alliance of Greater Cincinnati and one of its former member hospitals, The Christ Hospital. They are acused of paying unlawful remuneration to doctors in exchange for patient referrals.

The whistleblower will receive $23.5 million.

The original case was filed in March 2003. The United States complaint alleged that The Christ Hospital limited the opportunity to work at the Heart Station to those cardiologists who referred cardiac business to The Christ Hospital. The government further alleged that cardiologists whose referrals contributed at least two percent of the hospital’s yearly gross revenues were rewarded with a corresponding percentage of time at the Heart Station, where they had the opportunity to generate additional income by billing for the patients they treated at the unit and for any follow-up procedures that these patients required.

The government asserted that The Christ Hospital’s use of Heart Station panel time to induce lucrative cardiac referrals violated the federal Anti-Kickback Statute, which prohibits a hospital from offering or paying, or a physician from soliciting or receiving, anything of value in return for patient referrals. The United States also alleged that the claims The Christ Hospital submitted to Medicare and Medicaid as a result of this illegal kickback scheme constituted a violation of the False Claims Act.

A settlement has been reached in a whistleblower class action lawsuit brought against EMC Corporation who is accused of violating both the False Claims Act and the federal Anti-kickback Act.

The whistleblower reward for this settlement was not disclosed.

The original whistleblower case was filed in September 2004. The United States complaint alleged that, by misrepresenting its commercial pricing practices, EMC fraudulently induced the General Services Administration (GSA) to enter into a contract with prices that were higher than they would have been had the information technology company not made false misrepresentations. Specifically, the United States alleged that the Hopkinton, Mass.-based company represented during contract negotiations that, for each government order under the contract, EMC would conduct a price comparison to ensure that the government received the lowest price provided to any of the company’s commercial customers making a comparable purchase. According to the government’s complaint, EMC knew that it was not capable of conducting such a comparison, and so EMC’s representations during the negotiations – as well as its subsequent representations to GSA that it was conducting the comparisons – were false or fraudulent.

The United States also alleged that EMC engaged in an illegal kickback scheme designed to influence the government to purchase the company’s products. EMC maintained agreements whereby it paid consulting companies fees each time the companies recommended that a government agency purchase an EMC product.

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.