National Dental Clinic Chain to Pay $1.3 Million to Resolve Allegations of Overbilling Medicaid

Tuesday, September 5, 2017

BOSTON – The U.S. Attorney’s Office and the Massachusetts Attorney General’s Office announced today that Dental Dreams, LLC, a national dental chain with locations in Massachusetts, has agreed to pay $1.375 million to resolve allegations that it improperly billed the Massachusetts Medicaid program (MassHealth) for unnecessary and unjustifiable dental procedures.

“Dental Dreams enriched itself at taxpayer expense by improperly billing Medicaid,” said Acting U.S. Attorney William D. Weinreb. “We will continue to work with our law enforcement partners to ensure that federal and state health care dollars are spent properly.”

“This dental chain’s extensive improper billing violated state regulations and cost our state’s Medicaid program more than a million dollars,” said Massachusetts Attorney General Maura Healey. “As a result of this joint investigation, today’s settlement provides restitution to MassHealth and ensures that these funds are properly used to benefit its members.”

“Medicaid is designed to provide health care services to some of the most vulnerable members of our society and it’s our agency’s mission to ensure government health funds are spent properly,” said Special Agent in Charge Phillip M. Coyne of the U.S. Department of Health and Human Services Office of Inspector General. “Working with our Federal and State partners, we will continue to hold accountable any medical professional who, just to enrich themselves, bills Medicaid for more intensive and expensive services than those actually provided.”

“The company took advantage of a vulnerable patient population when it submitted claims to MassHealth for medically unnecessary and unreasonable dental procedures,” said Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division. “Today’s settlement underscores the FBI’s commitment to investigate health care providers who overbill federal and private health insurance programs to maximize profits. We urge anyone with information regarding overbilling practices to contact us.”

The settlement resolves allegations that Dental Dreams overbilled the Massachusetts Medicaid program for surgical extractions of teeth and for a specific kind of oral examination.

The settlement resolves a lawsuit filed by a former employee under the whistleblower provisions of the False Claims Act, which permits private parties to sue on behalf of the government for false claims for government funds and to receive a share of any recovery.

Acting U.S. Attorney Weinreb, Massachusetts Attorney General Healey, HHS-OIG SAC Coyne and FBI SAC Shaw made the announcement today. The case was handled by Assistant U.S. Attorneys Michelle Leung, Sonya Rao, and Kriss Basil of Weinreb’s Civil Division and Assistant Attorney General Stephany Collamore of Healey’s Medicaid Fraud Division.

Mylan Agrees to Pay $465 Million to Resolve False Claims Act Liability

Thursday, August 17, 2017

Mylan Underpaid Medicaid Rebates on EpiPen

BOSTON – The U.S. Attorney’s Office announced today that pharmaceutical companies Mylan Inc. and Mylan Specialty L.P. have agreed to pay $465 million to resolve allegations that they violated the False Claims Act by knowingly misclassifying EpiPen, a branded epinephrine auto-injector drug, as a generic drug to avoid paying rebates owed to Medicaid.  Mylan Inc. and Mylan Specialty L.P. are both wholly owned subsidiaries of Mylan N.V., a Dutch-registered entity headquartered in Canonsburg, Penn.

Congress enacted the Medicaid Drug Rebate Program to ensure that state Medicaid programs were not susceptible to price gouging by manufacturers of drugs that were available from only a single source.  It therefore subjected such single-source, or brand name drugs, to a higher rebate that includes any difference between the drug’s current price and the price the drug would have had if its price had increased only at the general rate of inflation.  In contrast, generic drugs originating from multiple manufacturers are subject to lower rebates that, at least until recently, did not include an inflationary component.

The government contends that Mylan improperly avoided paying state Medicaid programs the higher rebates for branded drugs by misclassifying EpiPen as a generic drug, even though EpiPen had no FDA-approved therapeutic equivalents and even though Mylan marketed and priced EpiPen as a brand name drug.  Mylan raised the price of EpiPen by approximately 400% between 2010 and 2016.

“Mylan misclassified its brand name drug, EpiPen, to profit at the expense of the Medicaid program,” said Acting United States Attorney William D. Weinreb.  “Taxpayers rightly expect companies like Mylan that receive payments from taxpayer-funded programs to scrupulously follow the rules.  We will continue to root out fraud and abuse to protect the integrity of Medicaid and ensure a level playing field for pharmaceutical companies. We commend Sanofi for bringing this matter to our attention.”

“This settlement demonstrates the Department of Justice’s unwavering commitment to hold pharmaceutical companies accountable for schemes to overbill Medicaid, a taxpayer-funded program whose purpose is to help the poor and disabled,” said Acting Assistant Attorney General Chad A. Readler of the Department of Justice’s Civil Division.  “Drug manufacturers must abide by their legal obligations to pay appropriate rebates to state Medicaid programs.”

As part of this settlement, Mylan has also entered into a corporate integrity agreement with the Department of Health and Human Services Office of Inspector General (HHS-OIG) that requires, among other things, an independent review organization to annually review multiple aspects of Mylan’s practices relating to the Medicaid drug rebate program.

“Our five-year corporate integrity agreement requires intensive outside scrutiny to assess whether Mylan is complying with the rules of the Medicaid Drug Rebate Program,” said Gregory E. Demske, Chief Counsel to the Inspector General for the U.S. Department of Health and Human Services. “In addition, the CIA requires individual accountability by Mylan board members and executives.”

A competing pharmaceutical manufacturer, Sanofi, raised this matter with the United States Attorney’s Office in 2014.  At the time, Sanofi was selling another epinephrine auto-injector drug called AUVI-Q and was reporting it to the Medicaid Drug Rebate Program as a brand name drug.  In 2016, Sanofi filed a complaint against Mylan under the qui tam provisions of the False Claims Act, which permits private parties to sue on behalf of the government and to receive a share of any recovery.  See United States ex rel. sanofi-aventis US LLC v. Mylan Inc., et al., No. 16cv11572 (D. Mass.).  As a result of today’s settlement, Sanofi will receive $38.7 million as its share of the federal recovery, plus a share of the states’ recovery.

Acting U.S. Attorney Weinreb, Acting Deputy Assistant Attorney General Raab, and HHS OIG Chief Counsel Demske made the announcement today.  The matter was handled by Assistant U.S. Attorneys Gregg Shapiro and Kriss Basil of Weinreb’s Office, and by Trial Attorneys Augustine Ripa and Nicholas Perros of the Justice Department’s Civil Division.