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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.

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, 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.


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