Archive for the ‘Case Studies’ Category

South Carolina Ambulance Company Settles False Claims Allegations for $800,000

The Williston Rescue Squad Inc., (Williston Rescue) located in Williston, South Carolina recently settled allegations under a False Claims qui tam action that it provided medically unnecessary ambulance transports to Medicare beneficiaries.  Under Medicare regulations ambulance companies are only reimbursed for non-emergency transportation services if the patient is confined to bed or has a medical condition such that any other form of transportation, such as a van, would endanger the patient’s health.

Sandra McKee filed the qui tam action under the provisions of the False Claims Act.  McKee is a clinical social worker at a health care facility that routinely works with patients transported by Williston Rescue.  The $800,000 settlement resolved the allegations that Williston Rescue submitted claims for reimbursement to Medicare for routine, non-emergency transportation services that were not medically necessary and that the company created false documents to make the transports appear to meet the Medicare requirements for such services.

McKee will receive $160,000 as her share of the recovery under the False Claims Act’s provision for bringing this fraud to the government’s attention.

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Boehringer Ingelheim Agrees to Pay $95 Million to Settle False Claims Act Allegations

The Department of Justice, on Thursday October 25, 2012, announced its settlement with Boehringer Ingelheim Pharmaceuticals Inc.(Boehringer) to resolve allegations that Boehringer improperly promoted its drugs,  Aggrenox, Atrovent, Combivent and Micardis for uses that were not medically accepted indications; promoted the sale and use of Combivent and Atrovent at doses that exceeded those covered by federal health care programs; that Boehringer made unsubstantiated claims about Aggrenox’s efficacy, and that the company paid kickbacks to health care professionals in exchange for prescribing these four named drugs.  As a result of these actions, the government alleged that false claims were submitted to government health care programs for reimbursement for these drugs.

The settlement arose from a qui tam action filed in the District of Maryland by whistle-blower Robert Heiden, a former sales representative for Boehringer. The government and states intervened in the action and settled the alleged claims for $95 million, of which the federal government will obtain $78,455,048 and the state Medicaid programs will share $16.544,952.  Under the provisions of the False Claims Act that permit the whistle-blower to receive a portion of the proceeds, Mr. Heiden will receive more than $17 million.

The Food and Drug Administration (FDA) approved Aggrenox to prevent secondary strokes.  The settlement resolves allegations that Boehringer promoted Aggrenox for certain cardiovascular events such as myocardial infarction and peripheral vascular disease, neither indication of use was approved by the FDA.  Although doctors may prescribe drugs for uses that the FDA did not approve, or for “off-label” uses, a pharmaceutical company, such as Boehringer, may not market the drugs for such “off-label” uses.

The FDA approved Combivent to treat continued symptoms of bronchospasm in patients with COPD who already are on a bronchodilator.  The government alleged that Boehringer marketed Combivent for use prior to another bronchodilator in treating COPD.  The FDA has not approved this indication of use for Combivent.

Finally, as to the government’s off-label allegations, it was alleged that Boehringer marketed Micardis for treatment of early diabetic kidney disease.  The FDA approved Micardis to treat hypertension.

Additionally, the settlement resolves the allegations that Boehringer knowingly promoted the sale and use of Combivent and Atrovent at doses that exceeded those covered by federal health care programs.  Furthermore, Boehringer knowingly made unsubstantiated claims about Aggrenox’s efficacy, including that it was a superior drug to Plavix.  Unless a pharmaceutical company has specifically researched and performed specific FDA regulated head to head testing as between two drugs, thus, proving a drug’s superiority over another, the pharmaceutical company is not allowed to make these kind of superiority claims when marketing its drugs.

The settlement also resolves claims that Boehringer paid kickbacks to health care professionals as incentive to prescribe Aggrenox, Atrovent, Combivent and Micardis. Such payments are in violation of the federal and state Anti-Kickback Statutes. Under the recent amendments to the False Claims Act, a violation of the Anti-Kickback Statute is a violation under the False Claims Act.

The government will also enter a Corporate Integrity Agreement with Boehringer that requires the company to put in place procedures, audits and reviews of company behavior and to promptly detect conduct similar to that arising under the settlement.  The average length of such agreements is five years.

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City of Dallas Hit with Whistleblower Suit

In a qui tam complaint unsealed last week, whistleblowers Curtis Lockey and Craig MacKenzie alleged that the City of Dallas, Texas failed to affirmatively further fair housing as it was obligated to do when it accepted funding from the U.S. Department of Housing and Urban Development (“HUD”).

Lockey and MacKenzie claimed that the City of Dallas requested and received millions of dollars from HUD in community development block grants and public housing assistance grants that the city was not qualified for because it was out of compliance with its obligations to affirmatively further fair housing. The complaint alleged specifically that the City of Dallas was obligated to analyze impediments to fair housing choice, take action to overcome the effects of any such impediments, and maintain records of such analyses and actions.

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Whistleblowers Allege Fraud Regarding VA Mortgage Loans

Two whistleblowers, Victor Bibby and Brian Donnelly, brought suit against thirteen lenders on behalf of the United States in connection with fraudulent Department of Veterans Affairs (VA) home mortgage loans.  The suit alleges that the lenders charged borrowers unallowable fees that technically invalidated the VA guarantee.

Certain fees–otherwise typical of a real estate transaction–such as attorney’s fees or settlement closing fees are not allowed in closing a VA loan for purposes of refinancing. The lenders allegedly charged these fees but hid them from borrowers and the VA by disguising them as allowable fees, sometimes bundling them with permitted fees.

The suit is pending in the Northern District of Georgia.

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Houston Medical Supply Company Owner Sentenced for Medicare Fraud

The owner of Memorial Medical Supply, Sunny Robinson, was sentenced on August 30, 2011 to over 8 years in federal prison after a 5-day jury trial for alleged health care fraud and anti-kickback violations.  Robinson used names and Medicare numbers of doctors and beneficiaries to falsify  medical records on false and fraudulent claims in excess of $4.3 million to both Medicare and Medicaid. He illegally obtained protected health information including names, birth dates, medical histories, and Medicare and Social Security numbers from individuals and home health agencies.  The information was used to submit false and fraudulent claims for “Arthritis Kits,” power wheelchairs, diabetic supplies, and incontinence supplies.  In many instances, the beneficiaries did not need or order the medical equipment nor did a doctor prescribe the equipment. Claims also were submitted for medical equipment that was not provided. Memorial Medical Supply even submitted claims for reimbursement to Medicare for equipment supposedly delivered to deceased beneficiaries.

Three co-defendants, Manuel DeLuna, Lisa Jones, and Shirley Chavis, also were sentenced for their roles in the fraudulent scheme.

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New York District Court Holds that Government May Contact Employees Without Counsel Present

The United States District Court for the Eastern District of New York held that the Government did not violate the “no-contact” rule in connection with an investigation of Amgen, Inc., a biotechnology company.  Since 2006, the United States District Attorney for the Eastern District of New York has been investigating allegations that the company violated the False Claims Act and other federal statutes.  Amgen alleged that the Government violated New York professional responsibility rules when it contacted Amgen employees directly instead of through counsel.

New York Rule of Professional Conduct 4.2(a) generally prohibits an attorney from communicating with a party to a particular matter when the attorney knows the party to be represented by another attorney in the same matter. The court held that, because the Government had not intervened in the qui tam lawsuits against Amgen, it was not a “party” to the matter, and thus Rule 4.2(a) did not apply.  The court further held that Amgen was not a “party” to the grand jury investigation; therefore, Rule 4.2(a) did not prohibit Government attorneys or investigators from communicating directly with Amgen employees in connection with the investigation.

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Supreme Court Holds that Whistleblowers Cannot Base Claims on Information Received in Response to FOIA Requests

The public disclosure bar generally precludes qui tam relators from bringing actions based upon publicly disclosed information unless the relator is an original source of the information. Before the passage in 2010 of the Patient Protection and Affordable Care Act (“Affordable Care Act”), the False Claims Act (“FCA”) specifically prohibited private suits “based upon the public disclosure of allegations or transactions in a criminal, civil, or administrative hearing, in a congressional, administrative, or Government Accounting Office report, hearing, audit, or investigation, or from the news media.” In Schindler Elevator Corporation v. United States ex rel. Kirk, the Supreme Court held that a federal agency’s written response to a Freedom of Information Act (“FOIA”) request constitutes a “report” within the meaning of the FCA’s public disclosure bar.

Relator Daniel Kirk, a Vietnam veteran, was employed by Schindler Elevator Corporation (“Schindler”) from 1978 until 2003. He filed an action against Schindler in 2005, alleging that Schindler had submitted false claims for payment under its Government contracts because the company had falsely certified compliance with the Vietnam Era Veterans’ Readjustment Assistance Act of 1972. Kirk supported his allegations with information his wife had received from the Department of Labor (“DOL”) in response to three FOIA requests.

The Supreme Court held that the DOL’s written responses to the FOIA requests were “reports” within the meaning of the FCA’s public disclosure bar. (Note: The Supreme Court considered the version of the public disclosure bar in existence at the time Kirk’s suit was filed, prior to amendment by the Affordable Care Act.) It remanded the case to the United States Court of Appeals for the Second Circuit to determine whether Kirk’s suit was “based upon . . . allegations or transactions” disclosed in those reports.

Posted in Case Studies, False Certifications, Public Disclosure BarNo Comments

Joel Androphy Weighs in on Toyota’s Liability Costs

Last month, ABC News consulted attorney Joel Androphy on the costs that Toyota will be facing, following the significant number of car malfunctions that have left Toyota drivers injured, scared and distraught. See what he has to say in this article about a legal case involving an injured Toyota driver who experienced sudden acceleration and accident.

Local family files lawsuit against Toyota
…”Toyota is going to have to set aside billions and billions of dollars in order to compensate consumers, not only from just traffic accidents but everything from the value of the car to fender benders to people’s emotional damages,” said KTRK Legal Analyst Joel Androphy. Read More

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