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United States Pursues FCA Allegations

According to a DoJ press release, the United States has filed complaints against Dr. Aria Sabit, Reliance Medical Systems, Apex Medical Technologies, Kronos Spinal Technologies, and the company owners Brett Berry, John Hoffman, and Adam Pike under the False Claims Act alleging that Apex and Kronos paid physicians in order to get them to use Reliance spinal implants.  Specifically, the United States alleges that Reliance funneled improper payments to Dr. Sabit through Apex in exchange for using Reliance spinal implants in his surgeries.  Between May 2010 and July 2012, Dr. Sabit used Reliance implants in 90 percent of his patients in exchange for $438,570.  It is alleged that the payments induced Dr. Sabit to perform medically unnecessary surgeries on patients who did not need spinal implants.

“Improper payments to physicians can alter a physician’s judgment about patients’ true health care needs and drive up health care costs for everyone,” said Assistant Attorney General Stuart F. Delery for the Justice Department’s Civil Division.  “The Justice Department is committed to enforcing the laws that prohibit such payments.”

The lawsuit was initially brought by Dr. Cary Savitch and Dr. Gary Proffett under the qui tam or whistleblower provisions of the False Claims Act.

To report fraud, please contact Frohsin & Barger.

California Nursing Homes Face FCA Allegations

Watsonville Nursing Center, formerly Country Villa Watsonville East Nursing Center, and Watsonville Post-Acute Care Center, formerly Country Villa Watsonville West Nursing and Rehabilitation Center, in California are facing allegations that they overmedicated patients with antipsychotics and other medication for the benefit and convenience of staff according to a article in McKnights.  The medications were not medically necessary for the patients; however, they billed Medicare for the medication, in violation of the False Claims Act.

The complaint also names The Arba Group, a management group, and other owners as defendants.  While, the defense denies liability, the United States is pursuing the action to recover civil penalties.

To report Medicare fraud, please contact Frohsin & Barger.

SEC Announces Whistleblower Award

The Securities and Exchange Commission (SEC) announced a $300,000 whistleblower award to an employee in a company’s audit and compliance division according to a recent SEC press release.  The employee reported internally, but went to the SEC after the company refused to take action.  The information from the whistleblower led directly to a SEC enforcement action.

“Individuals who perform internal audit, compliance, and legal functions for companies are on the front lines in the battle against fraud and corruption.  They often are privy to the very kinds of specific, timely, and credible information that can prevent an imminent fraud or stop an ongoing one,” said Sean McKessy, Chief of the SEC’s Office of the Whistleblower.  “These individuals may be eligible for an SEC whistleblower award if their companies fail to take appropriate, timely action on information they first reported internally.”

SEC whistleblowers may be eligible for 10 to 30 percent of the amount collected.  By law, the SEC must protect whistleblower identities.

To report fraud, please contact Frohsin & Barger.

Frohsin & Barger Announces DoJ Intervention in Qui Tam Action Against Evercare Hospice (now Optum Palliative & Hospice Care)

Today,  the United States Department of Justice issued a press release stating that it has partially intervened in a qui tam suit filed by Frohsin & Barger against Evercare Hospice and Palliative Care (Evercare) for alleged false claims under the Medicare hospice benefit (United States ex rel. Rice v. Evercare Hospice, Inc., No. 14-cv-01647 (D. Colo.)). Renamed, Optum Palliative and Hospice Care, Evercare is a nationwide  for-profit provider of hospice services with ties to UnitedHealth Group Inc.

Frohsin & Barger filed the suit on behalf of a former employee of Evercare who was sadden by what she perceived to be an abuse of the hospice benefit and a deciet against patients who were unwittingly  convinced to forego all curative treatment and elect end-of-life care when they were not actually dying.  In announcing its intervention into the case, DoJ highlighted that the lawsuit makes “allegations that management pressured employees and physicians to admit and retain patients who were not terminally ill and challenged or disregarded physicians’ decisions that patients should be discharged.”

“Fewer than 25% of all False Claims Act qui tam cases result in intervention,” said Jim Barger, attorney for relator Sharelene Rice.  Barger is a scholar on the federal and state False Claims Act and whistleblower litigation who teaches upper level courses on the subject at the University of Alabama School of Law.  “So, we view government intervention as strong vindication that the United States agrees with our client and is willing to vigorously pursue her allegations.”

In recent years, for-profit corporations have made a huge push into the hospice market, which is overwhelmingly funded by taxpayer dollars, primarily through Medicare but also through Medicaid and Tricare.  Investigative reporters have also begun to question whether the staggering profits in hospice are legitimate, including recent reports by the Washington Post and by the Huffington Post.  Several major national hospice chains are currently under scrutiny and subject to lawsuits by the Department of Justice and former employee whistleblowers, many of whom are represented by Frohsin & Barger.  Under the False Claims Act, qualifying whistleblowers are entitled to receive 15-25% of any recovery made by the government in an intervened case.

To report hospice fraud or other Medicare fraud, contact Frohsin & Barger.

Optim Healthcare Settles FCA Allegations

According to a DoJ press release, Savannah-based Optim Healthcare has agreed to pay $4 million to resolve allegations that it submitted false claims to the Government.  The Government alleged that Optim Healthcare submitted claims to Medicare that were improperly inflated, up-coded for reimbursement, and in violation of the Stark Law which prohibits physician self-referrals, at its Tattnall County hospital and Savannah ambulatory surgical center.  The investigation began after the Government received numerous complaints from patients living in the Savannah area who were required to undergo major surgeries at the rural hospital in Tattnall County, 90 miles from Savannah, and a whistleblower filed a lawsuit under the qui tam provisions of the False Claims Act.  The Government alleges that the primary motivation for having the surgeries performed at the physician-owned Tattnall hospital was financial.

“Today’s settlement demonstrates that the OIG will aggressively investigate all allegations made against trusted healthcare providers who misrepresent services and violate the Physician Self-Referral Statute,” said Derrick L. Jackson, Special Agent in Charge of the United States Department of Health and Human Services, Office of Inspector General, Atlanta Regional Office.

To report Medicare fraud, please contact Frohsin & Barger.


Cancer Doctor Sentenced to 20 Years in Prison

Dr. Meera Sachdeva of Jackson, Mississippi was sentenced to 20 years in prison and ordered to repay approximately $8.2 million for fraud at the former Rose Cancer Center in Summit, Mississippi according to a recent article in USA Today.  Kristi Beeson, a former employee, and three other whistleblowers filed suit against Sachdeva and reported wrongdoing at the clinic to authorities according to the Clarion-Ledger.  Sachdeva allegedly re-used syringes and drew multiple patients chemotherapy drugs from the same bag.  It is also alleged that Sachdeva submitted claims for chemotherapy services provided while she was out of the country.  Sachdeva pleaded guilty in July 2014 to one count of health care fraud and two counts of making false statements.  Brittany McCoskey, Rose Cancer Center’s office manager, and Monica Weeks, who conducted the billing for Rose Cancer Center, were also sentenced for their roles in committing the fraud.

Dr. Sachdeva opened the Rose Cancer Center in 2005.  In July 2011, the Mississippi Health Department closed the facility after 11 patients were hospitalized for the same bacterial infection.  Sachdeva has been held without bond since she was arrested in August 2011 because she is considered a flight risk.

To report health care fraud, please contact Frohsin & Barger.

McKesson Corp. Resolves FCA Allegations

According to a DoJ press release, the San Francisco-based pharmaceutical distributor has agreed to pay $18 million to resolve FCA allegations.  Terrell Fox, a former finance director at McKesson, filed the suit in 2012 under the qui tam provisions of the False Claims Act.  He alleges that McKesson improperly set temperature monitors used in the shipping of vaccines thus failing to comply with the requirements of its contract with the Centers for Disease Control and Prevention (CDC).

“Ensuring the integrity and performance of government contracts is paramount, especially when they impact programs intended to protect young children,” said Derrick L. Jackson, special agent in charge of the U.S. Department of Health and Human Services – OFfice of Inspector General (HHS-OIG) in Atlanta.

The CDC has stated that the temperature monitors provided a secondary safeguard.  Other measures were and are taken to ensure that the vaccines are kept at appropriate temperatures during shipping.

To report fraud, please contact Frohsin & Barger.

Community Health Systems Resolves FCA Allegations

Community Health Systems, Inc. (CHS), the nation’s largest operator of acute care hospitals based in Franklin, Tennessee, has agreed to pay $98.15 million to resolve allegations that the company knowingly billed government health care programs for inpatient services that should have been billed as outpatient services and that one of the company’s affiliated hospitals, Laredo Medical Center, improperly billed Medicare for certain inpatient procedures and for services in violation of the Stark Law according to a DoJ press release.  Specifically, the United States alleged that CHS deliberately schemed to increase inpatient admissions of Medicare, Medicaid and TRICARE beneficiaries over the age of 65 who presented to the emergency departments at 119 CHS hospitals.  The allegations further provide that these inpatient admissions were not medically necessary.  The care provided to these beneficiaries should have been provided in a less costly outpatient setting.  The United States further alleges that Laredo Medical Center violated the Stark Law, by billing Medicare for services referred by a physician who was offered a medical directorship at the hospital.

“Charging the government for higher cost inpatient services that patients do not need wastes the country’s health care resources,” said Assistant Attorney General Stuart F. Delery for the Justice Department’s Civil Division.  “In addition, providing physicians with financial incentives to refer patients compromises medical judgment and risks depriving patients of the most appropriate health care available.”

This settlement resolves multiple lawsuits brought under the qui tam provisions of the False Claims Act.  The relators are Kathleen Bryant, Rachel Bryant, Bryan Carnithan, Amy Cook-Reska, Sheree Cook, James Doghramji, Thomas Mason, Scott Plantz, and Nancy Reuille.  All relators are former CHS employees from all across the United States.

To report health care fraud, please contact Frohsin & Barger.

Matson Navigation Co. Inc. to Settle FCA Allegations

According to, Hawaii’s largest cargo container shipping company, Matson Navigation, has agreed to pay $9.95 million to settle allegations that it, along with Horizon Lines, another major Hawaiian cargo container shipping company, improperly billed the United States Department of Defense for ocean transport fuel charges when rail was used for some portions.  Mario Rizzo, an Illinois freight consultant, brought the allegations in 2010 when he filed suit under the qui tam provisions of the False Claims Act.  Rizzo and his attorneys pursued the action even after the United States Department of Justice declined to intervene.  As a result, Rizzo will receive approximately $2.5 million of the settlement amount for his efforts.

Matson is currently facing two additional federal investigations: one relating to the September 2013 molasses spill into Honolulu Harbor and the other relating to pricing and other competitive practices of carriers operating in domestic trade.  Both may subject Matson to further fines and penalties.

To report fraud under the False Claims Act, please contact Frohsin & Barger.

Alabama Hospital System and Physician Group Settle FCA Allegations

Thanks to a lawsuit brought by Dr. Christian Heesch, a physician formerly employed by Diagnostic Physicians Group P.C. (DPG), pursuant to the qui tam provisions of the False Claims Act, the group, along with Infirmary Health System Inc. (IHS) and two IHS-affiliated clinics, has agreed to settle for $24.5 million according to a DoJ press release.  Dr. Heesch alleged that two IHS-affiliated clinics paid DPG a percentage of Medicare payments for tests and procedures referred by DPG physicians.  He went on to allege that Infirmary Medical Clinics P.C. (IMC), an affiliate of IHS, purchased a clinic from DPG and agreed to pay a share of the clinic’s revenues to DPG.

“Financial arrangements that compensate physicians for referrals encourage physicians to make decisions based on financial gain rather than patients’ needs,” said Assistant Attorney General for the Civil Division Stuart Delery.  “The Department of Justice is committed to preventing illegal financial relationships that undermine the integrity of our public health  programs.”

To report Medicare fraud, please contact Frohsin & Barger.


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