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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, 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.

Jury Finds Trinity Industries Defrauded U.S. of Millions

On Monday, a Texas jury found that Trinity Industries Inc. (Trinity) defrauded the United States government of $175 million by hiding changes to its guardrail systems.  According to an article in the New York Times, Joshua Harman, a competitor, filed a False Claims Act lawsuit, under the qui tam provisions of the act, in 2012 alleging that Trinity changed the design of its ET-Plus rail head without disclosing the changes to the Federal Highway Administration.  As a result of the change, the guardrail can seize up and impale vehicles that hit the end of the guardrail claims an article on Bloomberg.

The company could face liability close to $1 billion after the damages are tripled as required by the False Claims Act.  In addition, the Act imposes penalties for each false claim submitted.  Trinity has indicated that it will appeal the verdict.

To report fraud, please contact Frohsin & Barger.

Extendicare Settles Allegations of Substandard Care and Unnecessary Therapy

Thanks to two False Claims Act lawsuits, brought pursuant to the qui tam provisions of the act, Extendicare Health Services, Inc. (Extendicare) and its subsidiary Progressive Step Corp. (ProStep) have agreed to pay $38 million to resolve allegations that it billed Medicare and Medicaid for materially substandard nursing services and for medically unnecessary rehabilitation therapy services according to a DoJ press release.  The settlement resolves allegations that Extendicare billed the federal government for materially substandard nursing services provided in 33 facilities across 8 states.  For example, it failed to follow appropriate protocols to prevent pressure ulcers or falls.  The settlement also resolves allegations that Extendicare provided medically unreasonable and unnecessary rehabilitation therapy services to its Medicare beneficiaries in order to receive the highest per diem rate possible.

“Nursing home residents should not be subject to unreasonable or unnecessary rehabilitation therapy that is dictated by a company’s profits rather than patient needs,” said U.S. Attorney Zane David Memeger for the Eastern District of Pennsylvania.

Relator Tracy Lovvron will receive approximately $1.8 million as her share of the recovery in the RUGS upcoding case and Relator Donald Gallick will receive more than $250,000 as his share in worthless services case.

To report Medicare fraud, please contact Frohsin & Barger.

Medicare Fraud Arrests in South Florida

According to an article in the Miami Herald, federal authorities have now arrested and charged more than 30 suspects in relation to a Medicare fraud scheme in South Florida. The Department of Justice alleges that the suspects have submitted approximately $205 million in fraudulent claims to Medicare. Nearly 58 other suspects nationwide were also charged with Medicare related fraud as a part of this widespread takedown by the Justice Department.

The Miami-area is generally regarded as “the nation’s epicenter of Medicare corruption.” This reputation has been reinforced with the recent arrests, accounting for one-third of the total. On Thursday October 2nd, Karen Kallen-Zury, chief executive officer of Hollywood Pavilion Psychiatric Hospital, and two other executives, Daisy Miller and Michele Petrie, were arrested on charges of paying thousands of dollars in kickbacks to recruiters and patients. Many of the patients did not require mental health services. However, Kallen-Zury falsified documents to make it appear that the services were legitimate.

To report Medicare fraud, please contact Frohsin & Barger.

Shire Pharmaceuticals Resolves False Claims Act Allegations

As the result of the filing of two False Claims Act lawsuits, Pennsylvania-based Shire Pharmaceuticals LLC (“Shire”) has agreed to pay $56.5 million to resolve allegations regarding its marketing and promotion of Adderall XR, Vyvanse, Daytrana, Pentasa and Lialda, according to a DoJ press release.  A former Shire executive, Dr. Gerardo Torres, and three former Shire sales representatives, Anita Hsieh, Kara Harris and Ian Clark, filed the lawsuits under the qui tam provisions of the False Claims Act.  The settlement resolves allegations that between January 2004 and September 2010, Shire and its employees or representatives misrepresented and promoted various drugs including Adderrall XR, Vyvanse, Daytrana, Pentasa and Lialda despite lacking the clinical data to support its claims.

“Marketing efforts that influence a doctor’s independent judgment can undermine the doctor-patient relationship and short-change the patient.” said U.S. Attorney Zane David Memeger for the Eastern District of Pennsylvania.  “Where children’s medication is concerned, it can interfere with a parent’s right to clear information regarding the risks to the safety and health of their child.  Shire cooperated throughout this investigation and, in advance of this settlement, began to correct its marketing activities.”

To report False Claims Act violations, please contact Frohsin & Barger.

Skilled Nursing Facilities Settle FCA Allegations

According to a DoJ press release, Life Care Services, LLC (LCS) and CoreCare V LLP (doing business as ParkVista) have agreed to pay $3.75 million to settle allegations that they submitted false claims to Medicare for unreasonable or unnecessary rehabilitation therapy to patients in their skilled nursing facilities. LCS manages skilled nursing facilities throughout the country including ParkVista, a skilled nursing facility in Fullerton, California. LCS convinced ParkVista and other facilities to hire RehabCare Group East, Inc. (RehabCare) to provide rehabilitation therapy services.

The government alleges that LCS and ParkVista submitted, or caused to be submitted, false claims for rehabilitation therapy by failing to prevent RehabCare from providing unreasonable or unnecessary therapy to patients in order to increase Medicare reimbursement. The government further alleges that LCS and ParkVista failed to prevent RehabCare from utilizing other practices that inflated Medicare reimbursement for therapy services.

“Patients in skilled nursing facilities and the patients’ families should be able to have confidence that the facilities are not allowing therapy companies to manipulate the amount of therapy being provided based on financial motives,” said U.S. Attorney Carmen M. Ortiz for the District of Massachusetts.  “Settlements like this one show that, when a facility contracts with an outside rehabilitation therapy provider, the facility has a continuing responsibility to ensure that the provider is not engaged in conduct that causes the submission of false claims to Medicare.”

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

United States Pursues FCA Allegations Against Doctors for Spinal Implant Bribes

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.

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