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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.

Detroit Physician Pleads Guilty to Medicare Fraud Scheme

On July 1st, Dr. Walayat Khan pleaded guilty to one count of conspiracy to commit health care fraud, according to a DoJ press release.  Court documents alleged that Dr. Kahn paid cash to recruiters to refer Medicare beneficiaries.  Dr. Kahn would then write prescriptions for controlled substances to the patients that were medically unnecessary.  Further, it was alleged that since January 2009, Dr. Kahn and others agreed that he would refer Medicare patients to Detroit-area home health care agencies for medically unnecessary services.  Additionally, Dr. Kahn received and accepted kickbacks from home health agency owners in exchange for signing home health care documents.  Dr. Kahn billed Medicare for approximately $6 million for medically unnecessary controlled substances, physician services, and home health services.  He is due to be sentenced in October 2014.

To report Medicare fraud, please contact Frohsin & Barger.

Omnicare, Inc. to Settle False Claims Act Allegations

Thanks to a False Claims Act case filed by Donald Gale, a former Omnicare employee, the nation’s largest provider of pharmaceuticals and pharmacy services to nursing homes has agreed to pay $124.24 million to resolve allegations that the company offered improper kickbacks to skilled nursing facilities, according to a DoJ press release.  Mr. Gale alleges that Omnicare entered into below-cost contracts to supply prescription medication and other drugs to skilled nursing facilities in order to induce the facilities to select Omnicare as their pharmacy provider.

“Omicare provided improper discounts in return for the opportunity to provide medication to Medicare and Medicaid beneficiaries,” said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.  “Nursing homes should select their pharmacy provider based on the best quality, service and cost to the residents, not based on improper discounts to the nursing facility.”

Mr. Gale will receive $17.24 million as the first whistleblower under the qui tam provisions of the False Claims Act, which allows private parties to bring suit on behalf of the government and to share in any recovery.

To report Medicare fraud, please contact Frohsin & Barger.

Former Hospice Director Sentenced in Medicare Fraud Scheme

Earlier this week, U.S. District Judge Eduardo Robreno sentenced Alex Pugman, former director and co-owner of Home Care Hospice in Philadelphia, to two years, nine months in prison plus restitution for his involvement in a Medicare fraud scheme. Over approximately five years, Home Care Hospice falsely billed Medicare for $16.2 million in claims.  While the guideline-sentence range called for seven to nine years in prison for Pugman, the federal prosecutor petitioned the judge for a downward departure due to Pugman’s exceptional cooperation.  According to an article on philly.com, Pugman assisted in explaining the roles of other participants in the scheme, identified fraud in Home Care’s records, testified before the grand jury and at trial and helped the government identify fraud in the healthcare industry outside of Home Care Hospice.  Pugman apologized for his conduct, saying, “It was never my intention to defraud this country.  I regret, am deeply ashamed of my actions.”

To report Medicare fraud, please contact Frohsin & Barger.

Medtronic, Inc. Settles Allegations of Kickbacks to Physicians

Thanks to a False Claims Act case filed by Adolfo Schroeder, a former employee of Medtronic, the Minnesota-based medical device manufacturer has agreed to pay $9.9 million to settle allegations that the company paid kickbacks to physicians according to a DoJ press release.  Mr. Schroeder alleges that Medtronic paid, provided free marketing and business development plans, and provided tickets to sporting events to physicians in order to induce them to implant Medtronic pacemakers and defibrillators.

“Decisions about devices used to treat cardiac rhythmic disease should be based on the best interests of the patient, not on whether the manufacturer is going to pay a kickback,” said U.S. Attorney Benjamin Wagner of the Eastern District of California.  “These sorts of improper financial incentives not only undermine the integrity of medical decisions, they also waste taxpayer funds and are unfair to competitors who are trying to play by the rules.”

To report healthcare fraud, please contact Frohsin & Barger.

Ambulance Service Fraud

Ambulance service has been identified by the U.S. Department of Health and Human Services as one of largest areas of Medicare abuse according to a recent Bloomberg article.  The Medicare Payment Advisory Commission (MedPAC) reports that a large amount of this fraudulent spending comes from rides to and from dialysis treatment.  Medicare will only pay for ambulance services for dialysis patients who cannot get to their medical appointments or treatment by any other means.  In 2012, Medicare paid $5 billion to ambulance companies, more than went to cancer doctors or orthopedic surgeons.  Of that amount, nearly $700 million paid for rides to dialysis centers.  Assistant U.S. Attorney Beth Leahy, who has prosecuted half a dozen ambulance fraud cases, claims that it is “basically like a taxi service except an extremely expensive one that taxpayers are financing.”

Over the last year, the government has taken action against at least a dozen ambulance companies for alleged Medicare fraud.  For example, Penn Choice Ambulance Inc., a Philadelphia-based company, was recently indicted as a part of a $1.5 million scheme to defraud Medicare.  According to the indictment, Penn Choice recruited patients, promising them free rides to treatment and even paying cash to many patients to keep them coming back.  The indictment goes on to allege that Penn Choice employees would transport dialysis patients in their personal vehicles while billing Medicare for ambulance rides.

To report Medicare fraud, please contact Frohsin & Barger, LLC.

Frohsin & Barger Qui Tam Suit Prompts Amedisys to Pay $150 Million

In 2009, Frohsin & Barger client, April Brown was a nurse and single-mother of two, struggling to make ends meet in the sleepy town of Monroeville, Alabama, best known as home to writer Harper Lee and the inspiration for her fictional town of Maycomb in To Kill a Mockingbird. Brown travelled rural Alabama caring for homebound patients: elderly shut-ins and the indigent infirm. What she witnessed about her employer’s Medicare billing, however, eventually caused her to become a whistleblower in the groundbreaking case of United States ex rel. April Brown v. Amedisys, Inc., CV-10-BE-0135-S (NDAL 2009), which today resulted in the largest home health fraud settlement in U.S. history, prompting the company – which denied all wrongdoing – to return $150,000,000 to the taxpayers, according to court documents.

Brown and other whistleblowers who followed her lead will be awarded more than $26 million for exposing the alleged fraud under the terms of the settlement filed today with the court. As the first to come forward, Ms. Brown will receive the lion’s share of the award at just over $15 million, according to her attorneys. “April Brown is one of the most deserving people I know,” said her attorney Jim Barger. “After she blew the whistle, she worked the hardest of nursing shifts plus a weekend job cleaning beach rentals to make ends meet, but she took it in great stride with a roll of her eyes and characteristic laugh.”

According to Barger, things became so difficult for Brown after losing her job at Amedisys that at one point her home was under threat of foreclosure. “The most amazing part is that I don’t think April ever allowed herself to believe she’d receive an award – she just did what she knew was right even though it caused her great hardship in the process. She’s a tough, honest, smart woman, and this country needs more people like her.”

Other than ending her financial worries, Barger says Brown doesn’t expect the settlement to change her situation much. “She plans to lead a quiet farm life with her two children and to keep serving as a nurse to the poor and elderly in her community.” The lawsuit was brought by the firm of Frohsin & Barger under the qui tam provisions of the False Claims Act, which permit private citizens to file suit on behalf of the United States for fraud against the taxpayers.

Ohio Hospital Settles FCA Allegations

Ohio non-profit corporation, Memorial Hospital, has agreed to pay $8.5 million to settle allegations that it engaged in improper financial relationships with referring physicians according to a DoJ press release.  The allegations involved financial relationships that Memorial Hospital had with two physicians that violated statutory requirements under the False Claims Act, the Anti-Kickback Statute and the Stark Law.  One was a joint venture between Memorial Hospital and a pain management physician and the other was an arrangement under which an ophthalmologist purchased intraocular lenses and then resold them to Memorial Hospital at inflated prices.  Memorial Hospital disclosed these issues to the government.

“Physician referrals should be made exclusively on what’s best for the patient, not on financial relationships,” said U.S. Attorney for the Northern District of Ohio Steven M. Dettelbach.  “We hope that this settlement will once again help drive that message home.”

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

Pharmaceutical Company Settles FCA Allegations

Teva Pharmaceuticals USA Inc. and a subsidiary, IVAX LLC, have agreed to pay the government and the State of Illinois $27.6 million to settle False Claim Act allegations according to a DoJ press release.  The government specifically alleged that Teva and IVAX paid Dr. Michael J. Reinstein of Illinois to prescribe generic clozapine, an anti-psychotic medication, to his patients.  While clozapine has been approved for treatment-resistant forms of schizophrenia, it has serious potential side effects and is considered a drug of last resort, particularly for elderly patients.  For many years, Teva and IVAX allegedly paid Reinstein money, provided “other benefits,” and provided all expenses paid trips to Miami for Reinstein, his wife, and several of his employees in violation of the Anti-Kickback Statute.  The scheme also resulted in the submission of thousands of false claims to Medicare and Illinois Medicaid.

“The Department of Justice is committed to ensuring that pharmaceutical manufacturers who make payments to doctors to influence prescribing decisions are held accountable,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery.  “Schemes such as the one alleged in this case undermine the health care system and take advantage of elderly patients.”

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

Kentucky Addiction Clinic Settles FCA Allegations

The DoJ has announced that SelfRefind, a chain of addiction treatment clinics, PremierTox LLC, a clinical laboratory that performs urine testing, and their owners, Drs. Bryan Wood and Robin Peavler have agreed to settle False Claims Act allegations for $15.75 million.  The Government has alleged that the Kentucky companies and their owners submitted claims to Medicare and Medicaid for tests that were medically unnecessary, more expensive than those actually performed, or billed in violation of the Stark Law.  Specifically, the Government has alleged that in late 2010 SelfRefind began referring comprehensive drug screening tests to PremierTox that were unnecessary and more expensive than alternative tests.  The Government goes on to allege that PremierTox submitted inflated claims that misidentified the class of drug being tested and billed for tests referred by SelfRefind in violation of the Stark anti-kickback law.

“Federal health care programs are essential to many of our citizens,” said U.S. Attorney for the Eastern District of Kentucky Kerry B. Harvey.  “We will not tolerate efforts by misguided providers to unfairly enrich themselves at the expense of these programs and the taxpaying public.”

To report Medicare fraud, please contact Frohsin & Barger.

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