Amedisys Home Health Companies Agree to Pay $150 Million to Resolve False Claims Act Allegations

Amedisys Inc. and its affiliates (Amedisys) have agreed to pay $150 million to the federal government to resolve allegations that they violated the False Claims Act by submitting false home healthcare billings to the Medicare program, the Department of Justice announced today.  Amedisys, a Louisiana-based for-profit company, is one of the nation’s largest providers of home health services and operates in 37 states, the District of Columbia and Puerto Rico.

“It is critical that scarce Medicare home health dollars flow only to those who provide qualified services,” said Stuart F. Delery, Assistant Attorney General for the Civil Division.  “This settlement demonstrates the department’s commitment to ensuring that home health providers, like other providers, comply with the rules and don’t misuse taxpayer dollars.”

The settlement announced today resolves allegations that, between 2008 and 2010, certain Amedisys offices improperly billed Medicare for ineligible patients and services.  Amedisys allegedly billed Medicare for nursing and therapy services that were medically unnecessary or provided to patients who were not homebound, and otherwise misrepresented patients’ conditions to increase its Medicare payments.  These billing violations were the alleged result of management pressure on nurses and therapists to provide care based on the financial benefits to Amedisys, rather than the needs of patients.

Additionally, this settlement resolves certain allegations that Amedisys maintained improper financial relationships with referring physicians.  The Anti-Kickback Statute and the Stark Statute restrict the financial relationships that home healthcare providers may have with doctors who refer patients to them.  The United States alleged that Amedisys’ financial relationship with a private oncology practice in Georgia – whereby Amedisys employees provided patient care coordination services to the oncology practice at below-market prices – violated statutory requirements.

“Combating Medicare fraud and overbilling is a priority for my office, other components of the Department of Justice, and United States Attorneys’ Offices across the country,” said Zane David Memeger, United States Attorney for the Eastern District of Pennsylvania.  “We have recovered billions of dollars in federal health care funds from schemes such as the one alleged in this case.  Those are health care dollars that should be spent on legitimate medical needs.”

“Home health services are a large and growing part of our federal health care system,” said Sally Quillian Yates, United States Attorney for the Northern District of Georgia.  “Health care dollars must be reserved to pay for services needed by patients, not to enrich providers who are bilking the system.”

“Amedisys made false Medicare claims, depriving the American taxpayer of millions of dollars and unlawfully enriching Amedisys,” said Joyce White Vance, U.S. Attorney for the Northern District of Alabama.  “The vigorous enforcement work by assistant U.S. attorneys in my office, along with their colleagues in North Georgia, Eastern Pennsylvania, Eastern Kentucky and the Civil Division of the Justice Department, has secured the return of $150 million to the taxpayers and stands as a warning to future wrongdoers that we will aggressively pursue them.”

“This settlement represents a significant recovery of public funds and an important victory for the taxpayers,” said Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky.  “Fighting health care fraud and recovering tax payer dollars that fund our vital health care programs is one of the highest priorities for our district.”

Amedisys also agreed to be bound by the terms of a Corporate Integrity Agreement with the Department of Health and Human Services – Office of Inspector General that requires the companies to implement compliance measures designed to avoid or promptly detect conduct similar to that which gave rise to the settlement.

“Improper financial relationships and false billing, as alleged in this case, can shortchange taxpayers and patients,” said Daniel R. Levinson, Inspector General for the U.S. Department of Health and Human Services.  “Our compliance agreement with Amedisys contains strong monitoring and reporting provisions to help ensure that people in Federal health programs will be protected.”

This settlement resolves seven lawsuits pending against Amedisys in federal court – six in the Eastern District of Pennsylvania and one in the Northern District of Georgia – that were filed under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens to bring civil actions on behalf of the United States and share in any recovery.  As part of today’s settlement, the whistleblowers – primarily former Amedisys employees – will collectively split over $26 million.

This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Secretary of Health and Human Services Kathleen Sebelius.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $19.2 billion through False Claims Act cases, with more than $13.6 billion of that amount recovered in cases involving fraud against federal health care programs.

The United States’ investigation was conducted by the Justice Department’s Commercial Litigation Branch of the Civil Division; the United States Attorneys’ Offices for the Eastern District of Pennsylvania, Northern District of Alabama, Northern District of Georgia, Eastern District of Kentucky, District of South Carolina, and Western District of New York; the Department of Health and Human Services’ Office of Inspector General; the Federal Bureau of Investigation; the Office of Personnel Management’s Office of Inspector General; the Defense Criminal Investigative Service of the Department of Defense; and the Railroad Retirement Board’s Office of Inspector General.

The lawsuits are captioned United States ex rel. CAF Partners et al. v. Amedisys, Inc. et al. 10-cv-2323 (E.D. Pa.); United States ex rel. Brown v. Amedisys, Inc. et al., 13-cv-2803 (E.D. Pa.); United States ex rel. Umberhandt  v. Amedisys, Inc., 13-cv-2789 (E.D. Pa.); United States ex rel. Doe et al. v. Amedisys, Inc., 13-cv-3187 (E.D. Pa.); United States ex rel. Ognen et al. v. Amedisys, Inc. et al. 13-cv-4232 (E.D. Pa.); United States ex rel. Lewis v. Amedisys, Inc., 13-cv-3359 (E.D. Pa.); and United States ex rel. Natalie Raven et al. v. Amedisys, Inc. et al., 11-cv-0994 (N.D. Ga.).  The claims settled by the agreement are allegations only, and there has been no determination of liability.

14-422

Pharmaceutical Company to Pay $27.6 Million to Settle Allegations Involving False Billings to Federal Health Care Programs

Pharmaceutical manufacturer Teva Pharmaceuticals USA Inc. and a subsidiary, IVAX LLC, have agreed to pay the government and the state of Illinois $27.6 million for allegedly violating the False Claims Act by making payments to induce prescriptions of an anti-psychotic drug for Medicare and Medicaid beneficiaries .  Teva Pharmaceuticals USA is located in North Wales, Pa., and IVAX LLC is a Florida company.

“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 vulnerable patients.”

“Pharmaceutical companies must not be allowed to improperly influence physicians’ decisions in prescribing medication for their patients,” said U.S. Attorney Zachary T. Fardon for the Northern District of Illinois.  “Instead, those decisions must be made solely on the basis of the patient’s best medical interests.”

The settlement resolves allegations that Teva and IVAX made payments to an Illinois physician, Dr. Michael J. Reinstein, to induce the prescription of  generic clozapine, an anti-psychotic medication.  Clozapine has serious potential side effects and is generally considered a drug of last resort, particularly for elderly patients.  While clozapine has been approved for treatment-resistant forms of schizophrenia, it is also reported to cause numerous side effects, including a potentially deadly decrease in white blood cells, seizures, inflammation of the heart muscle and increased mortality in elderly patients.  The United States alleged that the payment scheme involving Reinstein began in August 2003, when Reinstein agreed to switch his patients to generic clozapine if IVAX, which was subsequently acquired by Teva Pharmaceuticals’ parent corporation, agreed to pay Reinstein $50,000 under a one-year “consulting agreement” and to provide other benefits to Reinstein, in violation of the federal Medicare and Medicaid Anti-Kickback Statute.  In addition to direct payments to Reinstein, IVAX allegedly also provided all-expenses paid trips to Miami for Reinstein, his wife and several of his employees.  Reinstein quickly became the largest prescriber of generic clozapine in the country, and prescribed the drug for many elderly patients.  Allegedly, the payments and other forms of remuneration from IVAX and later Teva Pharmaceuticals continued for many years, and resulted in the submission of thousands of false claims to the Medicare Part D and Illinois Medicaid programs.

The Anti-Kickback Statute prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid and other federally funded programs.  The Anti-Kickback Statute is intended to ensure that a physician’s medical judgment is not compromised by improper financial incentives and is instead based on the best interests of the patient.

On Nov. 15, 2012, the United States filed a civil action against Reinstein in United States v. Reinstein , alleging that he violated the False Claims Act as a result of his involvement in the payment scheme with Teva and IVAX.   The civil action against Reinstein remains pending in the Northern District of Illinois.

The government’s settlement of these allegations illustrates its emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Secretary of Health and Human Services Kathleen Sebelius.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $19 billion through False Claims Act cases, with more than $13.4 billion of that amount recovered in cases involving fraud against federal health care programs.

The settlement with Teva Pharmaceuticals and IVAX was the result of a coordinated effort by the U.S. Attorney’s Office for the Northern District of Illinois, the Commercial Litigation Branch of the Justice Department’s Civil Division, the Department of Health and Human Services Office of Inspector General and the Federal Bureau of Investigation.

 

The claims resolved by this settlement are allegations only, and there has been no determination of liability.