Labor

A settlement has been reached to resolve False Claims Act allegations against Kaiser Foundation Hospitals. Kaiser Sunnyside Medical Center, Kaiser Foundation Health Plan of the Northwest and Northwest Permanente P.C., Physicians & Surgeons (collectively, Kaiser NW) are accused of billing Medicare without obtaining written certifications of terminal illness required under the federal health care program.

Medicare hospice care providers like Kaiser NW must obtain written certifications of terminal illness for each hospice beneficiary’s initial certification period (the first 90 days of care) from the medical director of the hospice and the individual beneficiary’s attending physician, if the beneficiary has one. Medicare requires a hospice to obtain these certifications prior to billing Medicare in order to help ensure that hospice care is medically necessary.

In June 2005, Kaiser NW submitted a report to the Department of Health and Human Service’s Office of Inspector General disclosing that between October 2000 and March 2004, there were instances in which Kaiser NW did not obtain written certifications of terminal illness for hospice beneficiaries prior to billing Medicare for the beneficiaries’ initial certification period. The settlement announced today resulted from the company’s disclosure.

A settlement has been reached in a whistleblower class action lawsuit brought against Brookhaven Memorial Hospital who is accused of fraudulently inflating charges to Medicare.

The United States settled for $2.92 million, plus interest and the whistleblower will receive roughly $613,000, plus interest.

The case was originally filed by a whistleblower in 2005 against two different hospitals.  The United States alleged that the hospitals defrauded Medicare by fraudulently inflating their 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 ensure that hospitals possess the incentive to treat inpatients whose care requires unusually high costs. The lawsuit alleged that the hospitals inflated their charges to obtain supplemental outlier payments for cases that were not extraordinarily costly and for which outlier payments should not have been paid.

A settlement has been reached in a whistleblower class action lawsuit brought against Trinitas Regional Medical Center who is accused of fraudulently inflating charges to Medicare.

The United States settled for $3.02 million, plus interest and the whistleblower will receive a share of the recovery totalling approximately $679,000.

The case was originally filed by a whistleblower in 2005 against two different hospitals.  The United States alleged that the hospitals defrauded Medicare by fraudulently inflating their 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 ensure that hospitals possess the incentive to treat inpatients whose care requires unusually high costs. The lawsuit alleged that the hospitals inflated their charges to obtain supplemental outlier payments for cases that were not extraordinarily costly and for which outlier payments should not have been paid.

A settlement has been reached in a whistleblower class action lawsuit brought against Harborside Healthcare and HHC Nutrition Services.  They are accused of receiving kickbacks and assistance under the guise of a sham durable medical equipment (DME) provider.

The whistleblower will receive a $275,000 share of the government's recovery.

Originally filed in October 2008 against McKesson and MediNet, the United States alleged that Harborside Healthcare and HHC Nutrition Services received kickbacks and assistance and, in return, Harborside purchased its DME, such as non-enteral supplies, from McKesson.

A settlement has been reached in a whistleblower class action lawsuit brought against AT&T Missouri (formerly known as Southwestern Bell Telephone L.P.), who is accused of engaging in non-competitive bidding practices for Federal Communications Commission contracts.

The whistleblower will receive a $195,000 share of the government's settlement.

Originally filed in 2006, the United States alleged that the Company violated the False Claims Act in connection with the Federal Communications Commission's E-Rate program. 

The E-Rate program, which Congress created in the Telecommunications Act of 1996, provides funding for needy schools and libraries to connect to and utilize the Internet. Under the program, which is supported by fees collected from telephone users, schools apply for funds to pay for hardware and monthly connectivity service fees.

The government's complaint asserted AT&T Missouri provided false information to the E-Rate program and otherwise violated the program’s requirements by engaging in non-competitive bidding practices for E-Rate contracts. The United States further alleged that AT&T Missouri employees colluded with officials in the Kansas City, Mo., School District to award contracts to the company, extended contracts in violation of E-Rate rules and provided meals and other inducements to school district employees.

A settlement has been reached in a whistleblower class action lawsuit brought against Mylan Pharmaceuticals, UDL Laboratories, AstraZeneca Pharmaceuticals and Ortho McNeil Pharmaceutical.  They are accused of failing to pay appropriate rebates to state Medicaid programs for drugs paid for by those programs.

Mylan and UDL agreed to pay $118 million to resolve allegations that they underpaid their rebate obligations with respect to several Mylan drugs (nifedipine extended release tablets, flecainide acetate, selegiline HCL, Orphenadrine Citrate Aspirin and Caffeine tablets, Triamterene/Hydrochlorothiazide, Propoxyphene HCL, Propoxyphene HCL/Aspirin/Caffeine, Prophyxphene Napsylate/Acetaminophen, Ibuprofen tablets, Bumetanide, Cephalexin and Cefactor) and several UDL drugs (nifedipine extended release tablets, selegiline HCL, Triamterene & HCTZ, Propox Naps & APAP, Flecainide Acetate, Trihexyphenidyl, Ranitidine HCL syrup, Sucralfate Suspension, Selegiline HCL and Bumetanide). Because the Medicaid program is funded by both the federal and state governments, the federal government received $60,896,476.00, the states $49,824,389.00 of the settlement amount and $7,279,135.00 will be paid to entities that participated in the Public Health Service’s Drug Pricing Program.

Separately, AstraZeneca paid $2.6 million ($1.43 million to the federal government and $1.17 million to the states) to resolve allegations that it underpaid its rebate obligations with respect to Albuterol. Ortho McNeil paid $3.4 million ($1.87 million to the federal government and $1.53 million to the states) to resolve allegations that it underpaid its rebate obligations with respect to Dermatop.

The whistleblower will receive a $10,787,392 share of the total recovery.

Filed in 2010, the United States alleged that all four companies had sold innovator drugs that were manufactured by other companies and had classified those drugs as non-innovator drugs for Medicaid rebate purposes. As a result of the improper classification of these drugs, the companies underpaid their rebate obligations under the Medicaid Rebate Program. The Medicaid Prescription Drug Rebate Program was enacted by Congress in 1990 out of concern for the costs the Medicaid was paying for outpatient drugs. By agreeing to participate in the Medicaid Rebate Program and signing these rebate agreements, the four companies agreed to pay quarterly rebates to Medicaid that were based upon the amount of money that health care program paid for each company’s drugs. The precise amount of a rebate is determined in part by whether a drug is considered an "innovator" drug or a "non-innovator" drug. The rebate that must be paid for innovator drugs is higher than the rebate for non-innovator drugs.

A settlement has been reached in a whistleblower class action lawsuit brought against Dynamics Research Corporation (DRC) who is accused of engaging in a fraudulent kickback scheme involving two technical services contracts with the Air Force.

The contracts, first awarded in 1996, sought DRC’s expertise in procuring computer equipment and services for the Theater Battle Management Core Systems (TBMCS) program at Hanscom Air Force Base in Massachusetts. The TBMCS program provides the military with an integrated system to plan and execute air battle plans for operations and intelligence personnel at the force and unit levels. The contracts required DRC’s employees to certify that neither they nor their spouses had financial interests that would interfere with their ability to deliver unbiased advice while performing the contracts. DRC failed to obtain the certificates from former vice presidents Paul Arguin and Victor Garber, who headed the project.

The United States alleged that from 1997 to 2000, DRC, through Mr. Arguin and Mr. Garber, steered Air Force contracts for computer equipment and services to companies owned by themselves, Mr. Arguin’s wife, and others, in exchange for kickbacks and inflated contract prices that produced windfall profits for the two DRC executives. In one of the schemes, Arguin and Garber allegedly substituted inexpensive memory modules for those required by the contract, causing the Air Force to overpay for the nonconforming modules.

A settlement has been reached in a whistleblower class action lawsuit brought against Endoscopic Technologies Inc (Estech) who is accused of marketing its medical devices for uses other than what is approved by the U.S. Food and Drug Administration (FDA).

The whistleblower will receive $210,000 as a recovery reward.

The case was originally filed by a whistleblower.  The United States' complaint alleged Estech 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 FDA). The government also alleged that Estech promoted expensive heart surgeries 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 reimbursements, and paid kickbacks to healthcare providers to use its devices. The United States asserted that by engaging in this conduct, Estech 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 Lighthouse Disaster Relief and partners Gary Heldreth and Kerry Farmer. They are accused of accepted payment for work that was not completely performed on a contract with the Department of Homeland Security.

The settlement agreements require Heldreth, Farmer and Lighthouse to accept a judgment of $4 million less the approximately $1.3 million previously garnished by the government.

The lawsuit was originally filed in February of 2006.  The United States alleged the defendants knowingly breached their contract to build and operate a basecamp to house and feed first responders who went to New Orleans to help with rescue and recovery efforts after Hurricane Katrina. The complaint alleged that the defendants made false statements to FEMA employees in order to be paid prematurely. The defendants then failed to build and staff a basecamp sufficient to house the number of first responders called for in their contract.

A settlement has been reached in a whistleblower class action lawsuit brought against NuVasive Inc who is accused of causing health care providers to submit false claims to Medicare and other federal health care programs.

According to the settlement agreement, the federal share of the civil settlement is $12,583,413.84, and the state Medicaid share of the civil settlement is $916,586.16. The whistleblower will receive a $2.2 million share of federal reward.

The whistleblower case was originally filed in September 2012.  The United States complaint alleged that between 2008 and 2013, NuVasive promoted the use of the CoRoent System for surgical uses that were not approved or cleared by the FDA, including for use in treating two complex spine deformities, severe scoliosis and severe spondylolisthesis.  As a result of this conduct, the United States alleged that NuVasive caused physicians and hospitals to submit false claims to federal health care programs for certain spine surgeries that were not eligible for reimbursement.  In more detail, the government complaint asserts NuVasive knowingly offered and paid illegal remuneration to certain physicians to induce them to use the CoRoent System in spine fusion surgeries, in violation of the federal Anti-Kickback Statute.  The illegal remuneration consisted of promotional speaker fees, honoraria and expenses relating to physicians’ attendance at events sponsored by a group known as the Society of Lateral Access Surgery (SOLAS).  SOLAS was allegedly created, funded and operated solely by NuVasive, despite its outward appearance of independence.