Whistleblower Law Blog

$3.8M Settlement in Medicare Fraud Lawsuit Alleging that Unnecessary Cardiac Procedures Were Performed by EMH Regional Medical Center and Ohio Heart Center Settle

February 05, 2013

The Department of Justice has announced that Lorain County, Ohio EMH Regional Medical Center (EMH) and North Ohio Heart Center Inc. (NOHC) have both agreed to settle allegations of submitting false claims to Medicare and will pay the United States $3,864,857 and $541,870, respectively.

The lawsuit alleges that between 2001 and 2006, EMH, a non-profit community hospital, and NOHC, at the time an independent physician group practicing at EMH, performed unnecessary cardiac procedures on Medicare patients. According to the Justice Department, angioplasty and stent placement procedures were performed on heart disease patients who did not need either procedure.

This settlement is part of the Department of Justice (USDOJ) and the Department of Health and Human Services’ effort to reduce and prevent Medicare and Medicaid fraud. To this effect, Stuart F. Delery, Principal Deputy Assistant Attorney General of the USDOJ Civil Division, stated:

“Billing Medicare for cardiac procedures that are not necessary or appropriate contributes to the soaring costs of health care and puts patients at risk. The settlement demonstrates the Department of Justice’s efforts both to protect public funds and safeguard Medicare beneficiaries.”

The Employment Law Group® law firm’s whistleblower attorneys have helped many clients file suit against employers that fraudulently bill the U.S. government, and have established favorable precedents under the retaliation provision of the False Claims Act.

R. Scott Oswald Publishes Article Review of Whistleblower-Favorable Trends in 2012

January 20, 2013

R. Scott Oswald, managing principal of The Employment Law Group, P.C., recently published an article in Law360 reviewing favorable developments in employment law for whistleblowers during 2012.

According to Oswald, these developments “further open the door to greater whistleblower revelations in the future, resulting in fewer laws being broken, savings for taxpayers, safer working conditions, increased awards to relators, other benefits and even lives being saved.”

Among the significant developments for whistleblowers in 2012 discussed were:

• The Department of Justice collecting nearly $5 billion in False Claims Act settlements and judgments
• The IRS and SEC Whistleblower Offices announced some of their first and largest awards
• The passage of the Whistleblower Protection Enhancement Act (WPEA) strengthened legal protections for federal employees who blow the whistle by disclosing government abuse, fraud and waste
• States continued to enact local False Claim Acts to come into compliance with the federal False Claims Act
• The Administrative Review Board (ARB) at the Department of Labor continued its whistleblower-favorable trend
• Federal courts interpreted the Dodd-Frank Act’s anti-retaliation provisions to include internal complaints, with the first Dodd-Frank claims surviving a motion to dismiss in federal court.

The article, “2012 Opens The Door For More Whistleblower Participation”, was published in the January 3, 2013 edition of Law360.

 

The Employment Law Group® law firm has an nationwide whistleblower protection practice representing employees who have been victims of retaliation, including a $819,000 False Claims Act whistleblower retaliation verdict on behalf of a client.

Florida Diagnostic Sleep Testing Center Agrees to Pay $15.3 Million Settlement for Submitting False Claims to Federal Healthcare Programs

January 17, 2013

The Department of Justice has announced that American Sleep Medicine LLC, headquartered in Jacksonville, Florida, has agreed to pay $15,301,341 to settle allegations that the company violated the False Claims Act by improperly billing for sleep diagnostic services that were not eligible for payment under Medicare, TRICARE and the Railroad Retirement Medicare Program.

According to the lawsuit, American Sleep had technicians who did not meet federal program requirements conduct polysomnographic diagnostic sleep testing. This test is used to diagnose sleep disorders but must be conducted by technicians who are licensed or certified by a state or national credentialing body in order to be eligible for reimbursement by Medicare and TRICARE. The DOJ alleged that American Sleep knew that it was violating the law and submitted false claims between January 1, 2004 and December 31, 2011.

This lawsuit is part of the federal government’s effort to combat health care fraud under Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative and to ensure that patients receive what is represented to them by healthcare professionals. It also highlights the government’s effort to stop abuse of taxpayer-funded programs like Medicare.   David J. Hale, U.S. Attorney for the Western District of Kentucky, stated:

Medical providers who overbill Medicare defraud the taxpayers and drive up the cost of health care for us all. Recovering taxpayer dollars lost to fraud helps keep strong those critical public health care programs so many people depend on.

In addition to the $15.3 million settlement, American Sleep entered into a five-year Corporate Integrity Agreement with the Office of Inspector General of the Department of Health and Human Services to enhance accountability by the company.

The Employment Law Group® law firm’s whistleblower attorneys have helped many clients file suit against employers that fraudulently bill the U.S. government, and have established favorable precedents under the retaliation provision of the False Claims Act.

British Contractor APTx Vehicle Systems to Settle False Claims Act Suit

January 17, 2013

British contractor APTx Vehicle Systems Limited has agreed to plead guilty to conspiracy to defraud the United States government, the Coalition Provisional Authority that governed Iraq from April 2003 to June 2004, the government of Iraq, and JP Morgan Chase Bank. Additionally, APTx has entered into a civil settlement agreement to resolve a related False Claims Act lawsuit and will pay $1 million in criminal fines.

According to the criminal information filed in the United States District Court for the District of Massachusetts on December 10, 2012, APTx was charged with wire fraud conspiracy for engaging in a fraudulent scheme involving a contract from August 2004 for procuring fifty-one vehicles for the Iraqi Police Authority. The U.S. government alleges that the contract was awarded to a “prime” contractor who subcontracted the vehicle procurement to APTx for $5.7 million, paid by JP Morgan bank. In order to receive payment from JP Morgan, APTx allegedly submitted falsified shipping documents claiming that the fifty-one vehicles were completed and ready to be shipped to Iraq. However, APTx knew that none of the vehicles had been built or were legally owned by APTx. Furthermore, APTx listed a company as the freight carrier despite knowing that company was not a shipping company and named a fictitious company as the freight forwarder.

The Employment Law Group® law firm’s whistleblower attorneys have helped many clients file suit against employers that fraudulently bill the U.S. government, and have established favorable precedents under the retaliation provision of the False Claims Act.

Healthpoint Ltd. and DFB Pharmaceuticals Agree to Pay $48 Million False Claims Act Settlement for Submitting Claims for Unapproved Prescription Drug

January 17, 2013

Healthpoint Limited and DFB Pharmaceuticals have agreed to pay the federal government up to $48 million to settle allegations that they submitted false claims for an unapproved drug ineligible for reimbursement through Medicare and Medicaid. Under the settlement agreement, Healthpoint and DFB will pay $28 million, plus an additional $20 million if in the next three years there is a change in ownership of Healthpoint or DFB.

The medicaid fraud lawsuit claims that Healthpoint launched Xenaderm, a prescription drug for treating bedsores on patients in nursing homes, without ever receiving Food and Drug Administration (FDA) approval. Under the Federal Food Drug and Cosmetic Act, drug manufacturers must first receive FDA approval before they are able to introduce any new drugs to the market and before they can request Medicare and Medicaid reimbursement.

The Department of Justice alleges that Healthpoint intended to market Xenaderm as a new prescription ointment modeled after drugs that were on the market before October 1962.  In doing this, Healthpoint was attempting to avoid the time, effort, and expense associated with receiving FDA approval. Furthermore, Healthpoint allegedly misrepresented the regulatory status of Xenaderm in its quarterly reports submitted to the government.  In fact, Healthpoint failed to complete a double-blind placebo-controlled clinical study, which never established the effectiveness or safety of Xenaderm.

“This resolution is yet another example of the government’s enduring efforts to ensure that drug manufacturers comply with the critical FDA requirements for the efficacy of their drugs and the integrity of their data,” said U.S. Attorney Carmen M. Ortiz.   “This office will continue to vigorously police these key requirements that ensure that the public has access to, and the government pays only for effective medications.”

The Employment Law Group® law firm’s whistleblower attorneys have helped many clients file suit against employers that fraudulently bill the U.S. government, and have established favorable precedents under the retaliation provision of the False Claims Act.

Oregon Law Journal Publishes Commentary by R. Scott Oswald on SEC Enforcement Priorities and Potential Future Actions against Dark Pool Trading

January 07, 2013

On December 20, 2012, whistleblower lawyer and managing principal of The Employment Law Group, P.C., R. Scott Oswald, published an article on the a recent U.S. Securities Exchange Commission (SEC) settlement that may encourage more enforcement actions against dark pool trading.

According to Mr. Oswald, “dark pools facilitate large trades off the main exchanges” and “because the trades are secret, dark pools allow institutional investors to make big trades without revealing their intentions.”   The use of such alternative trading systems, led to the SEC’s enforcement action against and eventual settlement with Pipeline Trading, LLC for $1 million to resolve claims that Pipeline violated its disclosure duties and engaged in securities fraud.

Mr. Oswald also notes that this settlement sends a powerful commission that the SEC is “directly confronting the issues alternative trading systems pose” and that the “SEC’s willingness to prosecute claims with small damages gives employees and incentive to come forward” should they learn of misconduct by their employers.

The article, “Whistleblower Attorneys: Recent SEC Settlement with Pipeline Inc. may encourage Dark Pool Trading Suits” was originally published in the December 2012 edition of the Oregon Legal Journal and also appeared in Traders’ Magazine.

The Employment Law Group® law firm is a leader in the field of whistleblower protection law and has published a guide on the SEC’s new rules for the Dodd-Frank whistleblower program.

Whistleblower Rewards Total Nearly $5 Billion under False Claims Act in 2012

December 21, 2012

On December 4, 2012 the Justice Department announced that in fiscal year ending in September 30, 2012 the United States recovered a total of $4.9 billion in whistleblower rewards in the form of settlements and judgments in civil cases involving fraud against the federal government. The Justice Department reports that this figure is the highest recovery for a single year since the False Claims Act was amended in 1986, surpassing the previous record by over $1.7 billion. This total brings the total of recoveries under the False Claims Act since January 2009 to $13.3 billion.

Attorney General Eric Holder stated:

“Today’s announcement underscores the Obama Administration’s ongoing commitment to recover losses, to prevent fraud, to bring abuses to light, and to hold accountable those who violate the law and exploit some of the government’s most critical programs… Thanks to the dedicated work of attorneys, investigators, analysts, and support staff at every level of the Justice Department – along with our state and local partners across the country – we have secured the largest annual recovery in the Department’s history.   By aggressively investigating allegations of waste and pursuing those who would take advantage of the most vulnerable members of society, I’m confident that we will continue to build on this historic progress in the months and years ahead.”

The Employment Law Group® law firm’s whistleblower attorneys have helped many clients file suit against employers that fraudulently bill the U.S. government, and have established favorable precedents under the retaliation provision of the False Claims Act.

Panel Finds Whistleblower Retaliation Against WMATA Employee Who Reported Technology Project

December 17, 2012

Public records obtained by a nonprofit website- Government Attic, reveal that the Washington, D.C. Metropolitan Area Transit Authority (WMATA) Whistleblower Retaliation Hearing Panel found that a former employee who blew the whistle on a troubled technology project was the victim of retaliation. This case is the first case since the panel was formed in 2010 in which the agency agrees that WMATA violated laws prohibiting whistleblower retaliation.

The panel believes that the former employee’s February 2010 termination was in part due to his cooperation with the agency’s Office of Inspector General (OIG) audit of a $6.9 million information technology project aimed at fixing problems with People Soft software, which is used by Metro.

Although the panel did not reinstate the employee, it ruled that the former employee is a “capable person” and should be given “preferred consideration” for future openings for which he qualifies.

The Employment Law Group® law firm has an extensive nationwide whistleblower practice representing employees who have been victims of retaliation.

 

Medicare False Claims Result in $900,000 Settlement by Baylor University

December 12, 2012

Baylor University Medical Center, Baylor Health Care System and HealthTexas Provider Network (collectively, “Baylor”) have agreed to pay a $907,355 settlement for allegedly submitting false claims and double billing Medicare, the Civilian Health and Medical Program of the Uniformed Services (TRICARE) and the Federal Employees Health Benefit Program (FEHBP) between 2006 to May 2010.

According to the Department of Justice, Baylor submitted false claims for several radiation treatments, and billed for high-reimbursement  oncology procedures when it could have billed cheaper services. Additionally, Baylor submitted billing for procedures lacking the required supporting documents in the patient’s medical records and improperly billed for radiation services without adequate corroboration from physician supervisors.

Stuart F. Delery, Principal Deputy Assistant Attorney General for the Justice Department’s Civil Division, said:

“Physicians who participate in Medicare must bill for their services accurately and honestly… The Department of Justice is committed to ensuring that federal health care funds are spent appropriately.”

This lawsuit is part of an ongoing effort by the Department of Justice and the Department of Health and Human Services to combat medical billing fraud under the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative.

The Employment Law Group® law firm’s whistleblower attorneys have helped many clients file suit against employers that fraudulently bill the U.S. government, and have established favorable precedents under the retaliation provision of the False Claims Act.

SEC Whistleblower Program Receives Over 3,000 Whistleblower Tips in FY2012

November 27, 2012

The Securities and Exchange Commission (SEC) this month released its “Annual Report on the Dodd-Frank Whistleblower Program,” which announced that in fiscal year 2012 the agency received a total of 3,001 tips from all fifty states, Washington, D.C., Puerto Rico and from forty-nine foreign countries. Under the new program, the first reward was issued on August 21 to a whistleblower who reported a multimillion-dollar fraud. The report also found that out of the 3,001 tips received, the SEC issued 143 enforcement judgments and orders. These enforcement judgments and orders were posted by the Office of the Whistleblower as “Notices of Covered Action” because their monetary sanctions exceeded $1 million. Under the Dodd-Frank Whistleblower Program, individuals are given 90 days from the time in which these notices are posted to apply for a whistleblower incentive award.

“In just its first year, the whistleblower program already has proven to be a valuable tool in helping us ferret out financial fraud,” said SEC Chairman Mary L. Schapiro. “When insiders provide us with high-quality road maps of fraudulent wrongdoing, it reduces the length of time we spend investigating and saves the agency substantial resources.”
By R. Scott Oswald
The Employment Law Group® law firm is a leader in the field of whistleblower law and has published a guide on the SEC’s new rules for the Dodd-Frank whistleblower program.