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Stericycle, Inc. $28.5 Million Multistate Settlement Approved

On February 1, 2016, the allocation of a $28.5 million qui tam False Claims Act settlement involving Stericycle Inc, a medical waste disposal company, was approved. Stericycle previously agreed, in October 2015, to pay $26,750,000 to settle claims that the company illegally imposed price increases on its government customers.  The recent approval finalized the disbursement of the settlement among the qui tam relator, the United States, 14 states and Washington D.C.   The relator, a former government customer-relations specialist for Stericycle, will receive nearly  $5.7 million as her portion of the recovery and the relator’s counsel will receive $1,750,000 for attorney’s fees and costs as provided under the False Claims Act.

The case was originally filed in 2008 and alleged that Stericycle was illegally imposing 18% price increases, annually and even more frequently on federal and state government customers with long-term fixed price contracts that either did not permit price increases or permitted price increases only to address increases in the company’s costs. It was also alleged that the price increases bore no relation to the company’s costs.  The total amount of overcharges, between 2004 and 2008, were determined to be $11.76 million.  However, the total settlement amount of $28.5 million demonstrates the significance of the False Claims Act’s treble damages and attorney’s fees provisions.

To report healthcare fraud, please contact Frohsin & Barger.

 

Florida Urologist to Pay $1,050,000 to Settle False Claims Act Lawsuit

Dr. David Spellberg, a Fort Myers, Florida urologist has agreed to pay $1,050,000 to resolve allegations that he ordered unnecessary medical tests.  Dr. Spellberg, formerly of Naples Urology Associates, was also involved in a recent settlement stemming from allegations that Dr. Spellberg and other doctors ordered unnecessary cancer tests while working for 21st Century Oncology.  In December 2015, 21st Century Oncology, an international cancer treatment company, and Naples Urology Associates settled claims against the companies for $19.75 million.  The recent $1,050,000 settlement, announced January 29, 2016, resolved claims against Dr. Spellberg personally.

Both settlements stem from allegations originally brought under the qui tam provisions of the False Claims Act by a former medical assistant that worked under Dr. Spellberg.  The qui tam whistleblower will receive $3.2 million from the December corporate settlement and $200,000 of Dr. Spellberg’s recent settlement.

According to court documents, the allegations revolved around Dr. Spellberg’s practice of ordering of fluorescence in situ hybridization tests, commonly known as FISH tests.  The qui tam complaint alleged that the expensive FISH tests should only be utilized on rare occasions, however, Dr. Spellberg ordered the FISH tests for the majority of his patients, particularly Medicare patients.  The complaint also alleged that 21st Century Oncology knew of this practice and incentivized Dr. Spellberg with bonuses based on the number of tests he ordered.

A. Lee Bentley, III, the U.S. Attorney for the Middle District of Florida commented in a statement: “False claims such as these impact the solvency of our public healthcare programs and erode the confidence of those being serviced by that care.”

To report healthcare fraud, please contact Frohsin & Barger.

Radiology Company Agrees to Pay $8.7 Million to Resolve False Claims Act Lawsuits

Rose Radiology Centers, Inc., a radiology company with thirteen offices in the Tampa Bay Florida area, agreed on January 29, 2016 to pay $8.71 million to settle allegations that it violated the False Claims Act.  The allegations were originally brought by two former employees of Rose Radiology in separate qui tam lawsuits.  The two qui tam whistleblowers will receive a combined $1.7 million as their share of the recovery.  The allegations accused Rose Radiology of billing for services that were not medically necessary, providing kickbacks to referring physicians, performing services at facilities that were not enrolled in the Medicare program and not providing the required level of physician supervision.  “Not only do the kinds of frauds that were alleged in this case rob Medicare of needed funds, they threatened the health of elderly and disabled Americans,” said Shimon Richmond, special agent in charge for the Health and Human Services Office of the Inspector General.

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

South Florida Home Health Executive Convicted in $57 Million Medicare Fraud Scheme

After a six day trial and just over three hours of deliberation, a South Florida jury convicted the owner and manager of three Miami-area home health agencies of all charges for his role in a $57 million health care fraud scheme.  Khaled Elbeblawy, of Miramar, Florida, was convicted on January 21, 2016 of one count of conspiracy to commit health care fraud and wire fraud and one count of conspiracy to defraud the United States and pay health care kickbacks. Between January 2006 and May 2013, Elbeblawy and his co-conspirators used the three home health agencies to submit false and fraudulent claims to Medicare that were based on services that were not medically necessary, were not actually provided and were for patients who were procured through the payment of kickbacks to doctors and patient recruiters.  Evidence introduced at trial showed Medicare paid approximately $40 million of the total $57 million of false and fraudulent claims submitted by Elbeblawy and his co-conspirators.

The FBI and HHS-OIG investigated the case, which was brought as part of the Medicare Fraud Strike Force.  Since March 2007, the Medicare Fraud Strike Force has charged nearly 2,000 defendants who collectively billed the Medicare program over $6 billion.

To report healthcare fraud, please contact Frohsin & Barger.

Frohsin & Barger Qui Tam Practice Adds Locations in Florida and Georgia

Since its inception, Frohsin & Barger has represented qui tam whistleblowers across the nation in False Claims Act litigation.  Over the past seven years, the firm has represented clients from more than a dozen states and appeared in federal courts in every region of the country from its home offices in Alabama, recovering nearly $200 million for its clients and the United States taxpayers.  In an effort to continue to combat nationwide fraud, Frohsin & Barger now has strategically placed attorneys in Florida and Georgia, as well.

“We will always have a strong Alabama presence due to our close ties to the University of Alabama School of Law, my ongoing work there as an adjunct professor, and our love for the State and community.” said founding partner Jim Barger.  “But as a group of lawyers who routinely represent whistleblowers in states all over the country, working in the federal court system in multiple jurisdictions against corporations operating nationwide — we came to realize the importance of having boots on the ground in other states.

Barger stressed that the expansion will not change the tight-knit litigation team nor the identity and culture of the firm.  “Our home base will always be the Southeast, and this move into Florida and Georgia is evidence of that.  The South is part of who we are as people; our identity as lawyers and our mission as a firm is informed by the struggles of the South, particularly the civil rights movement.”  One of the firm’s original founders, Henry Frohsin, was best known for his intrepid prosecutions of the Ku Klux Klan in the test years of the Civil Rights Act before moving into private practice with Frohsin & Barger.

According to current managing partner Elliott Walthall, the firm strives to honor that part of its heritage by serving individuals who stand up to corporate fraud against the United States. Barger, who is a member of the state bars in both Alabama and Georgia, will operate from the Georgia location, while Mandee Caldwell — a new addition to the firm with extensive experience on Capital Hill in Washington — will operate from the Florida location.  All of the firm’s other attorneys will continue to operate out of Alabama.

Frohsin & Barger will expand upon its pioneering use of cloud-based technology to continue to operate as a close-working team while focusing on maintaining its reputation as a small, client-focused, client-accessible firm.  “We answer our own phones,” said Barger.  “People are always surprised by that — I suppose they expect to be routed through a series of support staff, but that’s not how we operate.” Despite the firm’s geographic expansion and growth and its high-stakes nationwide practice, that aspect of the firm will never change.  “It’s what our clients have come to expect,” said Walthall. “We wouldn’t’ know how to do it any other way.”

Rite Aid Resolves FCA Allegations

Thanks to a False Claims Act (FCA) lawsuit filed pursuant to the qui tam provisions of the Act by Jack Chin, Rite Aid Corporation (Rite Aid) has agreed to pay the United States $2.99 million to resolve allegations that it violated the FCA by inappropriately using gift cards to induce Medicare and Medicaid beneficiaries to transfer their prescriptions to Rite Aid.  According to a Department of Justice press release, Chin will receive approximately $508,300 of the settlement for his involvement.  Patricia Stamler and Phil Benson of the law firm of Hertz Schram PC represented Mr. Chin.

“Pharmacies are not allowed to improperly influence the decision-making of Medicare and Medicaid patients about where to fill prescriptions, ” said Special Agent in Charge Glenn R. Ferry for the U.S. Department of Health and Human Services Office of Inspector General.  “Pharmacy chains that manipulate patient choices in this way will be held accountable.”

To report Medicare fraud, please contact Frohsin & Barger.

Vascular Solutions CEO Indicted For Conspiracy

According to an article in the Star Tribune, a Texas grand jury has charged Howard Root, CEO of Vascular Solutions, with conspiring to sell a varicose-vein treatment device for unapproved uses.  Prosecutors claim that Vascular Solutions marketed a device called the Vari-Lase to seal off veins deep in the leg, although the Food and Drug Administration (FDA) approved the device for the treatment of superficial blood vessels only.  The Vari-Lase was pulled from the market over the summer after Vascular Solutions settled a civil whistleblower lawsuit alleging the same off-label marketing issue as the new criminal case.

“These charges involve a deceptive sales campaign led by the CEO of a public company,” said Joyce Branda, acting assistant attorney general for the Justice Department Civil Division.  “We will take action to hold corporations and their leaders responsible when they violate laws intended to protect public health.”

To report healthcare fraud, please contact Frohsin & Barger.

Biotronik, Inc. Resolves Kickback Allegations

According to a DoJ press release, Biotronik, Inc. (Biotronik) has agreed to pay $4.9 million to resolve allegations that it paid illegal kickbacks to physicians.  Specifically, the United States alleges that Biotronik induced physicians in Nevada and Arizona to use Biotronik devices, including pacemakers, by providing the physicians with regular high-priced meals and extravagant payments for membership on a physician advisory board.  The United States alleges that these kickbacks caused hospitals and surgery centers to submit false claims for Biotronik devices to Medicare and Medicaid.

“Today’s resolution of claims underscores one of the key purposes of the Anti-Kickback law – to ensure that the judgment exercised by health care providers in treating Medicare and Medicaid patients is not influenced by illegal payments,” said U.S. Attorney Benjamin Wagner for the Eastern District of California.

The lawsuit was originally filed in 2009 by former employee, Brian Sant, and his attorney Mycal Wilson under the qui tam provisions of the False Claims Act.  Sant will receive $840,000 for his part in bringing the lawsuit.

To report healthcare fraud, please contact Frohsin & Barger.

North Florida Shipyards Settles FCA Allegations

Thanks to a False Claims Act (FCA) lawsuit, filed under the qui tam provisions of the Act by Robert Hallstein and Earle Yerger, North Florida Shipyards and its president, Matt Self, have agreed to pay the United States $1 million to resolve allegations that they violated the FCA by creating a front company, Ind-Mar Services Inc., in order to win a Coast Guard contract designated for businesses owned by disabled veterans.  According to an article on News4JAX.com, it is alleged that North Florida Shipyards created In-Mar Services Inc. as a contracting vehicle.  North Florida Shipyards performed all of the work itself and received all profits.

“Special programs to assist disabled veterans are an important part of the SBA’s business development initiative,” said A. Lee Bentley III, U.S. Attorney for the Middle District of Florida.  “False Claims such as this undermine the integrity of this vital program and, where found, will be vigorously pursued by our Office.”

To report fraud, please contact Frohsin & Barger.

Columbia University Settles FCA Allegations

According to an article on Reuters, Columbia University has agreed to pay $9 million to settle a lawsuit brought pursuant to the qui tam provisions of the False Claims Act.  Craig Love, former director of finance for Columbia’s International Center for AIDS Care and Treatment Programs (ICAP), brought the lawsuit in 2011 alleging that Columbia submitted false claims in connection with grants it obtained to fund AIDS and HIV related research.  Specifically, he alleged that Columbia used grant money for work that was not dedicated to the funded projects.

“Grantees are required to use federal money for the purpose for which the grant was given and nothing else,” said U.S. Attorney Preet Bharara. “The applicable rules are clear, and they are at the core of ensuring that tax dollars are appropriately spent. Educational institutions, like everyone else, should be held accountable when they fail to follow those rules.”

To report fraud, please contact Frohsin & Barger.

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