Medicine

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 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 to Resolve False Claims Act allegations against Mercy Hospital Inc (d/b/a Mercy Medical Center) of Springfield, MA, who is accused of failing to adhere to Medicare guidelines.

In June 2007, Mercy disclosed to the Department of Health and Human Services Office of Inspector General that it could not demonstrate that it had provided the required level of therapy.

The settlement resulted from the company’s disclosure.  The allegations were that Mercy Medical Center, between 2005 and 2006, failed to provide, or failed to document that it provided, the minimum number of hours of rehabilitation therapy required under Medicare guidelines.

Under Medicare, inpatient rehabilitation hospitals must provide a minimum amount of rehabilitative therapy to their patients.

A settlement has been reached in a whistleblower class action lawsuit brought against FORBA Holdings LLC who is accused of causing bills to be submitted to state Medicaid programs for medically unnecessary dental services performed on children insured by Medicaid.

FORBA will pay $24 million, plus interest. The federal share of the civil settlement is $14,285,645, and the states’ Medicaid share is $9,714,355.25. Three whistleblowers will receive payments totaling more than $2.4 million from the federal share of the settlement.

The case stems from three lawsuits that were filed by individual whistleblowers. The United States alleged that FORBA was liable for causing the submission of claims for reimbursement for a wide range of dental services provided to low-income children that were either medically unnecessary or performed in a manner that failed to meet professionally-recognized standards of care. These services included performing pulpotomies (baby root canals), placing crowns, administering anesthesia (including nitrous oxide), performing extractions, and providing fillings and/or sealants.

A settlement has been reached in a whistleblower class action lawsuit brought against three home health agencies.   Nursing Personnel Home Care (Nursing Personnel), Extended Home Care (Extended) and Excellent Home Care (Excellent) are accused of submitting false claims to the New York Medicaid and Medicare programs.

The United States is receiving approximately $9.7 million as a result of the settlement with these three companies, and the state of New York is receiving approximately $14.3 million, for a total recovery of $24 million. The settlement resolves allegations from two different lawsuits filed by whistleblowers. One of the whistleblowers will receive $251,107 from the government’s recovery from Nursing Personnel. The other whistleblower's reward is $1,663,040 from the government’s recovery from Extended and Excellent.

The first of the two lawsuits was filed in 2006.  The United States alleged Nursing Personnel Home Care (Nursing Personnel) knowingly supplied aides with phoney training certificates to Extended Home Care (Extended) and Excellent Home Care (Excellent), which then billed New York Medicaid for the aides’ services; that Extended and Excellent knowingly billed for aides with phoney certificates who were untrained; and that Extended and Excellent knowingly submitted claims to the Medicare program for home health aide services purportedly rendered by aides supplied by Nursing Personnel that were not actually provided.

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 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.

The Indiana hospitals include St. Francis Hospital in Beech Grove, Deaconess Hospital in Evansville and St. John’s Hospital System in Anderson. The hospitals have agreed to pay the United States $3,158,629, $2,110,034 and $826,256, respectively.

The Alabama hospitals include St. Vincent’s East Hospital and St. Vincent’s Birmingham Hospital, both located in Birmingham, and Providence Hospital, located in Mobile. These facilities have agreed to pay the United States $1,459,395, $422,748 and $381,713, respectively.

The whistleblowers will receive a $1.4 Million recovery of the government's settlement.

These allegations stem from a whistleblower case filed in 2008. The United States asserted that, from 2002 to 2008, the six hospitals overcharged Medicare each time they performed 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 an out-patient surgery, but the government contends that the hospitals performed the procedure on an in-patient basis in order to increase their Medicare billings.

A settlement has been reached in a whistleblower class action lawsuit brought against HealthEast Care System. Three HealthEast Care System hospitals are accused of submitting false claims to Medicare.

The two whistleblowers' recovery amounts from this lawsuit that was filed in 2008, were not specified.

The United States complaint asserts that three HealthEast Care System hospitals overcharged Medicare from 2002 to 2007 by thousands of dollars each time they performed kyphoplasty, a minimally-invasive procedure used to treat certain spinal fractures that often are due to osteoporosis. The procedure can be performed safely as an outpatient surgery, but the government contends that the HealthEast hospitals performed the procedure on an inpatient basis in order to increase their Medicare billings.

A settlement has been reached in a whistleblower class action lawsuit brought against Regency Nursing and Rehabilitation Centers Inc who is accused of submitting false claims to Medicare and the Texas Medicaid program.

Specifically the United States complaint alleged that Regency submitted claims for reimbursement to Medicare and Medicaid for rehabilitation and skilled nursing services that were not reimbursable because the nursing home residents were not qualified for the services, the services were not medically necessary, or they were not supported by adequate documentation.