Tag Archives: Stuart F. Delery

$80 Million Judgment Entered Against BNP Paribas for False Claims to the U.S. Department of Agriculture

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The Department of Justice announced today that an $80 million False Claims Act judgment was entered against BNP Paribas for submitting false claims for payment guarantees issued by the U.S. Department of Agriculture (USDA).  BNP Paribas is a global financial institution headquartered in Paris.

“We will not tolerate the misuse of taxpayer funded programs designed to help American businesses,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery.  “Companies that abuse these programs will be held accountable.”

The United States filed a lawsuit against BNP Paribas in connection with its receipt of payment guarantees under USDA’s Supplier Credit Guarantee (SCG) Program.  The program provided payment guarantees to U.S.-based exporters for their sales of grain and other agricultural commodities to importers in foreign countries.  The program encouraged American exporters to sell American agricultural commodities to foreign importers and covered part of the losses if the foreign importers failed to pay.  The SCG Program regulations provided that U.S. exporters were ineligible to participate in the SCG Program if the exporter and foreign importer were under common ownership or control.

The judgment entered by the court resolves the government’s allegations that, from 1998 to 2005, BNP Paribas participated in a sustained scheme to defraud the SCG Program.  In furtherance of the scheme, American exporters and Mexican importers who were under common control improperly obtained SCG Program export credit guarantees for transactions between the affiliated exporters and importers.  In some cases, the underlying transactions were shams and did not involve any real shipment of grain.  BNP Paribas accepted assignment of the credit guarantees from the American exporters, even though it knew that the affiliated exporters and importers were ineligible for SCG Program financing, and a BNP Paribas vice-president, Jerry Cruz, received bribes from the exporters.  Beginning in April 2005, when the Mexican importers began defaulting on their payment obligations, BNP Paribas submitted claims to the USDA for the resulting losses.

On Jan. 20, 2012, Cruz pleaded guilty to conspiracy to commit bank fraud, mail fraud and wire fraud, and conspiracy to commit money laundering.

“I would like to thank the Department of Justice and the USDA General Counsel’s office for their collaboration in recovering $80 million under this judgment,” said Administrator of USDA’s Foreign Agricultural Service Phil Karsting.  “This illustrates the importance USDA and this administration places on protecting the integrity of our programs.”

The resolution of this matter was the result of a coordinated effort among the Commercial Litigation Branch of the Justice Department’s Civil Division, the USDA, the USDA Office of Inspector General, the U.S. Postal Inspection Service and the Internal Revenue Service Criminal Investigation.

The lawsuit is captioned United States v. BNP Paribas SA, et al., No. 4:11 cv 3718 (S.D. Tex.).

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King’s Daughters Medical Center to Pay Nearly $41 Million to Resolve Allegations of False Billing for Unnecessary Cardiac Procedures and Kickbacks

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Ashland Hospital Corp. d/b/a King’s Daughters Medical Center (KDMC) has agreed to pay $40.9 million to resolve allegations that it submitted false claims to the Medicare and Kentucky Medicaid programs for medically unnecessary coronary stents and diagnostic catheterizations and had prohibited financial relationships with physicians referring patients to the hospital, the Justice Department announced today.
Assistant Attorney General Stuart F. Delery of the Justice Department’s Civil Division, U.S. Attorney Kerry Harvey for the Eastern District of Kentucky and Special Agent in Charge Derrick L. Jackson at the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Kentucky region made the announcement.
“Hospitals that place their financial interests above the well-being of their patients will be held accountable,” said Assistant Attorney General Delery.    “ The Department of Justice will not tolerate those who abuse federal health care programs and put the beneficiaries of these programs at risk by providing medically unnecessary care.”
The government alleged that, between 2006 and 2011, KDMC billed for numerous unnecessary coronary stents and diagnostic catheterizations performed by KDMC physicians on Medicare and Medicaid patients who did not need them.    The government also alleged that the physicians falsified medical records in order to justify these unnecessary procedures, which allegedly generated millions of dollars in Medicare and Kentucky Medicaid reimbursements for KDMC.
“The conduct alleged in this matter is unacceptable, victimizing both taxpayers and patients,” said U.S. Attorney Harvey.    “Treatment decisions motivated by financial gain undermine public confidence in our health care system and threaten vital federal programs upon which so many of our citizens rely.    We will not relent in our efforts to protect the public from the sort of systematic misconduct alleged in this case.”
The settlement also resolves allegations that KDMC violated the Stark Law by paying certain cardiologists salaries that were unreasonably high and in excess of fair market value.    The Stark Law is designed to limit the influence of money on physicians’ medical decision-making by prohibiting financial relationships between hospitals and referring physicians, unless these relationships meet certain designated exceptions.
In connection with this settlement, KDMC has agreed to enter into a Corporate Integrity Agreement with HHS-OIG, which obligates the hospital to undertake substantial internal compliance reforms and to commit to a third-party review of its claims to federal health care programs for the next five years.
“Medically unnecessary procedures can cause serious health issues, cost the taxpayers millions of dollars each year and drain the Medicare Trust Fund,” said Special Agent in Charge Jackson.    “The OIG will continue to protect beneficiaries and hold health care providers accountable for improper claims.”
“This type of alleged conduct deceives individuals when they are seeking medical treatment and are vulnerable,” said Special Agent in Charge Perrye K. Turner of the FBI’s Louisville Field Division.  “The level of funds involved in this matter is staggering.    This money has been stolen from the patients and the taxpayers.”
The Commonwealth of Kentucky will receive approximately $1,018,380, which represents the state’s share of the recovered Medicaid funds.    The Medicaid program is funded jointly by the federal and state governments.
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 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 investigation was conducted by the FBI, the HHS-OIG, the Kentucky Office of Attorney General, Medicaid Fraud and Abuse Control Unit, the Commercial Litigation Branch of the Department of Justice’s Civil Division and the U.S. Attorney’s Office for the Eastern District of Kentucky.    The claims settled by this agreement are allegations only, and there has been no determination of liability.

 

Minnesota-Based Medtronic Inc. to Pay $9.9 Million to Resolve Claims That Company Paid Kickbacks to Physicians

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Medtronic Inc., of Fridley, Minnesota, has agreed to pay the United States $9.9 million to resolve allegations under the False Claims Act that the company used various types of payments to induce physicians to implant pacemakers and defibrillators manufactured and sold by Medtronic, the Justice Department announced today.

“Improper financial incentives have the potential to compromise physician medical judgment,” said Assistant Attorney General Stuart F. Delery of the Justice Department’s Civil Division.    “This case demonstrates the Department of Justice’s commitment to pursue medical device manufacturers that use improper financial relationships to influence physician decision-making.”

The United States alleged that Medtronic caused false claims to be submitted to Medicare and Medicaid by using multiple types of illegal kickbacks to induce physicians to implant Medtronic pacemakers and defibrillators.    Specifically, Medtronic allegedly induced physicians to use its products by: 1) paying implanting physicians to speak at events intended to increase the flow of referral business; 2) developing marketing/business development plans for physicians at no cost; and 3) providing tickets to sporting events.    The United States alleged that Medtronic paid the remuneration to persuade the physicians to continue using Medtronic products or to convert their business from a competitor’s products.

“Decisions about devices used to treat cardiac rhythmic disease should be based on the best interests of the patient, not on whether the manufacturer is going to pay a kickback,” said U.S. Attorney Benjamin Wagner of the Eastern District of California.  “These sorts of improper financial incentives not only undermine the integrity of medical decisions, they also waste taxpayer funds and are unfair to competitors who are trying to play by the rules.”

“As this settlement indicates, health care executives who try to boost profits by paying kickbacks to doctors will instead pay the government for their improper conduct,” said Special Agent in Charge Ivan Negroni of the U.S. Department of Health and Human Services Office of Inspector General’s San Francisco Office.  “We will continue to work with the Department of Justice to root out illegal, wasteful business arrangements.”

The settlement announced today stems from a whistleblower complaint filed by a former employee of Medtronic, Adolfo Schroeder, pursuant to the qui tam provisions of the False Claims Act, which permit private persons to bring a lawsuit on behalf of the United States and to share in the proceeds of the suit.    Schroeder will receive approximately $1.73 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 $13.7 billion of that amount recovered in cases involving fraud against federal health care programs.

The settlement with Medtronic Inc. was the result of a coordinated effort among the Department of Justice’s Civil Division; the U.S. Attorney’s Office for the Eastern District of California; and the Office of Inspector General of the U.S. Department of Health and Human Services.

The lawsuit is captioned United States ex rel. Schroeder v. Medtronic, Inc., No. 2:09-cv-0279 WBS EJB (E.D. Cal.).    The claims settled by this agreement are allegations only, and there has been no determination of liability.

Government Settles False Claims Act Allegations Against Florida-Based Baptist Health System for $2.5 Million

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Baptist Health System Inc. (Baptist Health), the parent company for a network of affiliated hospitals and medical providers in the Jacksonville, Florida, area, has agreed to pay $2.5 million to settle allegations that its subsidiaries violated the False Claims Act by submitting claims to federal health care programs for medically unnecessary services and drugs, the Department of Justice announced today.  The alleged misconduct involved Medicare, Medicaid, TRICARE and the Federal Employee Health Benefits Program.

“Providers that bill for unnecessary services and drugs contribute to the soaring cost of health care,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery.  “Providers must deal fairly and honestly with federal health care programs, and the Justice Department will investigate aggressively and hold accountable those who do not.”

This settlement resolves allegations that, from September 2009 to October 2011, two neurologists in the Baptist Health network misdiagnosed patients with various neurological disorders, such as multiple sclerosis, which caused Baptist Health to bill for medically unnecessary services.  Although Baptist Health placed one of the physicians at issue on administrative leave in October 2011, it did not disclose any misdiagnoses to the government until September 2012.

“This settlement sends a clear message that health care fraud will not be tolerated in our district, particularly when there is the potential for harm to patients,” said U.S. Attorney A. Lee Bentley III for the Middle District of Florida.

The improper conduct at issue in this case included Medicaid patients.  Medicaid is funded jointly by the states and the federal government.  The state of Florida, which paid for some of the Medicaid claims at issue, will receive $19,024 of the settlement amount.

“ Health care providers will not be permitted to provide patients unnecessary medical services and drugs and then pocket the improper payments they receive as a result,” said Acting Special Agent in Charge Brian Martens, U.S. Department of Health and Human Services Office of Inspector General.  “Our agency is dedicated to investigating health care fraud schemes that divert scarce taxpayer funds meant to provide for legitimate patient care.” 

The government’s investigation was initiated by a qui tam,or whistleblower, lawsuit filed under the False Claims Act by Verchetta Wells, a former Baptist Health employee.  The act allows private citizens to file suit for false claims on behalf of the government and to share in the government’s recovery.  Wells will receive $424,155. 

“These health care providers did not only violate the laws of the United States – they violated the trust placed in them by their patients,” said Inspector General of the U.S. Office of Personnel Management Patrick E. McFarland.  “Federal employees deserve health care providers, including hospitals, that meet the highest standards of ethical and professional behavior.  Today’s settlement reminds all providers that they must observe those standards and reflects the commitment of federal law enforcement organizations to pursue improper and illegal conduct that may put the health and well-being of their patients at risk.” 

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 $19.1 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. 

This settlement is the result of a coordinated effort among the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Middle District of Florida, the U.S. Department of Health and Human Services Office of Inspector General, the Defense Health Agency Program Integrity Office and the Office of Personnel Management Office of Inspector General. 

The claims resolved by this settlement are allegations only, and there has been no determination of liability.  The lawsuit against Baptist Health was filed in the U.S. District Court for the Middle District of Florida and is captioned United States ex rel. Wells v. Baptist Health System Inc. et al.

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

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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.

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Tennessee Substance Abuse Treatment Facility Agrees to Resolve False Claims Act Allegations for $9.25 Million

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The Department of Justice announced today that CRC Health Corp. (CRC) has agreed to pay $9.25 million to the federal government and the State of Tennessee to settle allegations that CRC knowingly submitted false claims by providing substandard treatment to adult and adolescent Medicaid patients suffering from alcohol and drug addiction at its facility in Burns, Tenn.  CRC,  based in Cupertino, Calif., is a nationwide provider of substance abuse and mental health treatment services.

“Medicaid patients who enter residential treatment programs for alcohol and drug addiction deserve to have treatment provided by qualified personnel according to the appropriate standard of care,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery.  “We will not tolerate health care providers who prioritize profit margins over the needs of their patients.”

CRC owns and operates a residential substance abuse treatment facility in Burns, Tenn., called New Life Lodge.  The government alleged that, between 2006 and 2012, New Life Lodge billed the Tennessee Medicaid program (TennCare) for substance abuse therapy services that were not provided or were provided by therapists who were not properly licensed by the state of Tennessee.  The government also alleged that New Life Lodge failed to make a licensed psychiatrist available to patients at the facility, as required by the state’s regulations; failed to maintain patient-staffing ratios required by Tennessee Department of Mental Health regulations and billed for Medicaid patients in excess of the state-licensed bed capacity at the facility.  In addition, the government alleged that New Life Lodge double-billed Medicaid for prescription substance abuse medications given to residents at the facility.  New Life Lodge currently is not treating Medicaid patients at its facility.

“Substance abuse of varying levels is rampant here and across the country,” said U.S. Attorney for the Middle District of Tennessee David Rivera.  “Fortunately, when needed, Medicaid or TennCare covers substance abuse treatment and certain mental health assistance.  When those services are required, the government will ensure that the treatment is provided with the highest possible quality of care to those patients.  Anything less is unacceptable.”

“Safeguarding TennCare’s mental and behavioral health support system is a particular focus of this office,” said Tennessee Attorney General Bob Cooper.

The allegations covered by the settlement were raised in a lawsuit filed by Angie Cederoth, who was previously employed in New Life Lodge’s billing department, under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government for the submission of false claims and to receive a share of any recovery.  Cederoth will receive $1.5 million as her share of the settlement proceeds.

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 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.

“Providers of health care services must not place profits above patients,” said Derrick L. Jackson, Special Agent in Charge of the U.S. Department of Health and Human Services Office of Inspector General in Atlanta.  “This was a vulnerable population of individuals who were seeking treatment for their substance abuse problems.  We will pursue these cases in order to ensure proper treatment is afforded to those seeking treatment.”

The investigation of this matter reflects a coordinated effort among the Commercial Litigation Branch of the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Middle District of Tennessee, the Federal Bureau of Investigation, the Tennessee Attorney General’s Office, the Tennessee Bureau of Investigation and the Department of Health and Human Services Office of Inspector General.

“The FBI is committed to investigating allegations of wrongdoing and false claims related to federally funded health care programs,” said A. Todd McCall, Special Agent in Charge of the Memphis Division of the FBI.  “The resolution of this matter is the result of the hard work by the individual investigators and the coordinated effort of all the agencies involved.”

“This resolution is indicative of a great collaborative effort to combat egregious and fraudulent activity against health care, which ultimately impacts everyone in Tennessee,” said Director of the Tennessee Bureau of Investigation Mark Gwyn.

The lawsuit is captioned U.S. ex rel. Cederoth v. CRC Health Corporation Inc. , CV-3-11-00897 (M.D. Tenn.).   The claims asserted against the defendants are allegations only, and there has been no determination of liability.

Astellas Pharma US Inc. to Pay $7.3 Million to Resolve False Claims Act Allegations Relating to Marketing of Drug Mycamine

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Pharmaceutical company Astellas Pharma US Inc. will pay $7.3 million to resolve allegations that it violated the False Claims Act in connection with its marketing and promotion of the drug Mycamine for pediatric use, the Justice Department announced today.  Astellas Pharma US Inc., located in Northbrook, Ill., manufactures and sells pharmaceutical drugs, including Mycamine.

“The FDA’s drug approval process requires companies to demonstrate the safety and efficacy of their products,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery.  “The Justice Department will hold accountable pharmaceutical companies that skirt these rules and seek to bill federal health care programs for uses of drugs that are not reimbursable.”

The settlement resolves allegations that, between 2005 and 2010, Astellas knowingly marketed and promoted the sale of Mycamine for pediatric use, which was not a medically accepted indication and, therefore, not covered by federal health care programs.  During this time period, the FDA approved Mycamine to treat adult patients suffering from serious and invasive infections caused by the fungus Candida, including infections in the esophagus, the blood and the abdomen, and to prevent Candida infections in adults undergoing stem cell transplants.  From 2005 through June 2013, however, Mycamine was not approved to treat pediatric patients for any use.

As a result of today’s $7.3 million settlement, the federal government will receive $4.2 million, and state Medicaid programs will receive $3.1 million.

“The settlement in this case further demonstrates our commitment to hold responsible any pharmaceutical company that disregards the FDA drug approval process and promotes drugs for uses before they have been deemed safe and effective,” said U.S. Attorney for the Eastern District of Pennsylvania Zane David Memeger.  “It’s a message that should resonate with all drug companies: there are consequences for violating the False Claims Act and putting profit ahead of government safeguards.”

The allegations resolved by the settlement arose from a lawsuit filed by Frank Smith, a former Astellas sales representative, under the False Claims Act’s whistleblower provisions, which permit private parties to sue for false claims on behalf of the government and to share in any recovery.  Smith will receive $708,852.

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 $19.1 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.

This case was a cooperative effort among the U.S. Attorney’s Office for the Eastern District of Pennsylvania, the Civil Division of the Department of Justice and the Offices of the Inspectors General of the Department of Health and Human Services and Office of Personnel Management.  The lawsuit is captioned United States ex rel. Smith v. Astellas Pharma, US Inc. et al., No. 10-999 (E.D. Pa.).

 

The claims resolved by the settlement are allegations only; there has been no determination of liability.

Government Settles False Claims Act Allegations Against Kansas Cancer Treatment Facility and Its Owner

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Hope Cancer Institute, a cancer treatment facility in Kansas, and Dr. Raj Sadasivan, the owner of Hope Cancer Institute, have agreed to pay $2.9 million to resolve allegations that they violated the False Claims Act by submitting claims to Medicare, Medicaid and the Federal Employee Health Benefits Program for drugs and services that were not provided to beneficiaries, the Department of Justice announced today.

“Billing Medicare and Medicaid for drugs that are not provided to beneficiaries contributes to the soaring costs of health care,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery.   “Providers will be investigated aggressively and held accountable for falsely billing federal health care programs.”

The settlement resolves allegations that, between 2007 and 2011, Sadasivan and Hope Cancer Institute submitted claims to federal health benefit programs for the chemotherapy drugs Rituxan, Avastin and Taxotere that were not provided to federal health care beneficiaries.   Sadasivan allegedly instructed the employees of Hope Cancer Institute to bill for a predetermined amount of cancer drugs at certain dosage levels, when lower dosages of these drugs were actually provided to beneficiaries.   As a result of these instructions, Hope Cancer Institute submitted inflated claims to federal health care programs for drugs that were not actually provided to patients.

“Health care providers that try to make a quick buck by billing taxpayers for services never provided will instead pay a high price for their greed-fueled fraud,” said Gerald T. Roy, Special Agent in Charge, U.S. Department of Health and Human Services Office of Inspector General.   “We are dedicated to investigating and prosecuting these types of deceptive schemes.”

The settlement resolves a lawsuit filed by Krisha Turner, Crystal Dercher and Amanda Reynolds, former employees of Hope Cancer Institute, under the qui tam, or whistleblower,provisions of the False Claims Act, which allow private citizens with knowledge of false claims to file suit on behalf of the government and to share in any recovery.

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 $19.1 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 settlement with Sadasivan and Hope Cancer Institute was the result of a coordinated effort among the Justice Department’s Civil Division, the U.S. Attorney’s Office for the District of Kansas and the U.S. Department of Health and Human Services Office of Inspector General.   The False Claims Act suit was filed in the U.S. District Court for the District of Kansas and is captioned United States ex rel. Turner et al. v. Hope Cancer Institute, et al.

The claims settled by this agreement are allegations only; there has been no determination of liability.

American Family Care Inc. to Pay $1.2 Million to Settle Allegations of Inflated Medicare Claims

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American Family Care Inc. has agreed to pay the government $1.2 million to resolve allegations under the False Claims Act that it knowingly submitted claims to Medicare for outpatient office visits that were billed at a higher rate than was appropriate, the Justice Department announced today.  American Family Care is a network of walk-in medical clinics headquartered in Birmingham, Ala., with offices in Alabama, Tennessee and Georgia.

“Mischarging the government for office visits wastes valuable government resources that could be used to care for other patient needs,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery.  “At a time of increasing concern about the cost of medical care, it is especially important to ensure that health care providers are not overbilling the government by improperly inflating their claims.”

Following guidance adopted by the Centers for Medicare and Medicaid Services, health clinics such as American Family Care bill Medicare for their services by selecting a corresponding Evaluation and Management code.  The codes are divided into five different levels – from basic (level 1) to most complex (level 5).  Higher level codes result in higher reimbursement from Medicare than lower level codes.  The government alleged that American Family Care knowingly selected Evaluation and Management codes for a level of services that exceeded those actually provided in order to artificially increase the amount of reimbursement it received for those visits.

“The False Claims Act is a critical tool for weeding out fraud and protecting the taxpayers,” said U.S. Attorney for the Northern District of Alabama Joyce White Vance.  “My office will continue to return funds, like the $1.2 million in this case, to the taxpayers by proceeding against those who abuse our public health programs.

“Billing the government for services not provided as claimed cheats both taxpayers and patients,” said Derrick L. Jackson, Special Agent in Charge of the Office of Inspector General, U.S. Department of Health and Human Services region including Alabama.  “We will pursue aggressively providers like American Family Care alleged to have improperly maximized reimbursements.”

The civil settlement resolves a lawsuit filed by Anita C. Salters, a former employee of American Family Care, under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the government for false claims and to obtain a portion of the government’s recovery.  Salters’ share has not yet been determined.

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 on 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.

This settlement with American Family Care was the result of a coordinated effort among the U.S. Attorney’s Office for the Northern District of Alabama; the Department of Justice’s Civil Division, Commercial Litigation Branch; the Office of Inspector General of the U.S. Department of Health and Human Services and the Federal Bureau of Investigation.

The lawsuit is captioned United States ex rel. Anita C. Salters v. American Family Care Inc. (N.D. Ala.).  The claims resolved by this settlement are allegations only, and there has been no determination of liability.

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

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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.