News & Cases

Medicare-certified hospice care facilities are sprouting up all over the nation. According to a May 2013 report by the Office of the Inspector General (OIG), there are currently 3,585 Medicare-certified hospices, up 43 percent from 2005. Medicare provides the funding for 84 percent of all national hospice services.

Increasing Trends in Hospice Stay Length and Living Discharges Raising Red Flags

As expected, Medicare beneficiary numbers are up, rising from 729,000 in 2003 to over 1.2 million in 2012. Medicare payments for hospice care climbed from $5.9 billion to over $15.1 billion in the same nine year period. Amazingly, the number of beneficiaries being discharged alive rose almost 50 percent between 2003 and 2012....

According to the 2012-2021 National Health Expenditure Projections, durable medical equipment (DME) spending could surpass $50 billion by the end of 2015. For public and private health care programs, fraudulent billing is estimated at between 3% and 10% of total health care expenditures (FBI 2011). Apply this figure to DME spending and the estimated cost of DME fraud could fall between $1.5 billion and $5 billion each year.

The DME industry is no stranger to whistleblower claims. Almost every major device company has been accused of health care fraud at least once. The steady growth of the industry and overall lack of credentials required to distribute DME offers deceitful individuals and companies heaps of opportunity to defraud the US government....

A $30 million False Claims Act settlement was announced today in the U.S. Investigations Services (USIS) whistleblower initiated lawsuit that accused USIS and Altegrity, its parent company of fraudulent conduct as reported by former USIS executive Blake Percival under the whistleblower provisions of the act.

Blake Percival filed a lawsuit alleging that USIS violated the FCA by committing government contract fraud, breaching the terms of their contract to provide background checks for the U.S. Office of Personnel Management (OPM). USIS provided background checks for OPM from 1996 until September 2014. The suit alleged that between at least March 2008 and September 2012, USIS failed to adhere to contractually promised quality reviews of these background checks.

USIS Executive Blake Percival Says Fired for Reporting Fraud

Mr. Percival was an executive at USIS, working for the company from 2001 to June 2011, most notably as the Director of Fieldwork Services. Percival further alleged that he was fired in retaliation for refusing to have those employees under his supervision participate in fraudulent activity. [break]...

Whistleblower and pediatrician, Dr. Jean Moore, will collect an $825,000 cash reward for filing a False Claims Act lawsuit alleging that her employer, Mercy Health Springfield Communities, supplied illicit financial incentives to referring physicians. Mercy Health Springfield has agreed to pay the U.S. government $5.5 million to settle the allegations of healthcare fraud.

Dr. Jean Moore Files Whistleblower Lawsuit Alleging Improper Physician Referral Bonuses

Mercy Health Springfield Communities, a partnership between Springfield Missouri Hospital and Mercy Clinic Springfield, provides health care services for southwestern Missouri residents. Dr. Jean Moore’s whistleblower claim alleged that Mercy Health submitted false claims to Medicare when they billed for services that included financial bonuses for physicians’ patient referrals....

The pharmacy arena provides a vast, alluring and easily manipulated cash source for fraudsters. According to the Centers for Disease Control and Prevention, national expenditures for prescription drugs in 2013 alone were approximately $270 million, 9.3% of the total US health expenditures. Current projections show total healthcare spending will top $3.2 trillion in 2015. From 2015 to 2021, pharmaceutical spending is projected to grow at an average rate of 5-7%.

On the front-line in medication distribution, pharmacists, pharmacy owners, technicians, managers, pharmaceutical sales representatives, compliance officers, nurses and physicians are in prime position to detect and uncover fraudulent activities. Illegal kickbacks, false billings and off-label marketing arrangements violate Federal and State False Claims Acts, the Anti-Kickback Statute, and other federal and state laws. In turn, the number of pharmacy and health care professionals initiating successful and lucrative whistleblower actions under the False Claims Act continues to climb.

The 2014 Fiscal Year Report of the Departments of Health and Human Services and Justice on the Health Care Fraud and Abuse Control Program (HCFAC FY2014) listed eight examples of successful pharmacy fraud cases initiated, prosecuted or settled during fiscal year 2014. Of the eight cases mentioned (only a handful of the total 2014 pharmacy fraud cases), the United States government reclaimed over $157.6 million. The 2013 fiscal year report (HCFAC FY2013) mentioned pharmacy fraud cases with recoveries totaling $86 million....

Thursday, July 30, seven US Senators, advocacy groups and individuals assembled in a private luncheon to applaud the unanimous Senate resolution declaring July 30th as National Whistleblower Appreciation Day – a day to honor whistleblowers and provide impetus for stronger whistleblower legal protections.

The declaration falls on the 237th anniversary of the first whistleblower law, enacted with zero dissent by the Continental Congress on July 30, 1778. The original Continental Congress document proclaimed, “That it is the duty of all persons in the service of the United States, as well as all other inhabitants thereof, to give the earliest information to Congress or any other proper authority of any misconduct, frauds or misdemeanors committed by any officers or persons in the service of these states, which may come to their knowledge.”

Senate Whistleblower Protection Caucus Members’ Victory

The gathering of approximately 200 people included Chairman and Vice Chairman of the bipartisan Senate Whistleblower Protection Caucus, Charles Grassley (R-IA) and Ron Wyden (D-OR), Caucus members Senators Ron Johnson (R-WI), Tammy Baldwin (D-WI), Thom Tillis (R-NC), and Mark Kirk (R-IL), members of the U.S. Department of Justice, state Attorneys General, whistleblowers, and renowned whistleblower attorneys....

Dennis Edmonds was a stockbroker in North Carolina; Ellwood Jones, a wealth manager in California; and the firm of Foster & Dunhill peddled so-called “business protection plans” in Florida.

They all had one nefarious thing in common, according to Ohio-based investor-rights attorney John Chapman -- they all put their clients into Nikolai Battoo’s “Private International Wealth Management (PIWM)” portfolios, with the bogus claim that Battoo was a financial genius of epic proportions.

Two Peas in a Pod – PIWM’s Nikolai Battoo and Madoff

The PIWM turned out to be a massive Ponzi scheme connected to the infamous Bernard Madoff. Investors lost $20 billion in Madoff’s house-of-cards scam....

Nuvasive Inc. has agreed to pay $13.5 million to settle a False Claims Act (FCA) healthcare fraud lawsuit with the United States, the US Department of Justice announced Thursday. Whistleblower Kevin Ryan initiated the whistleblower lawsuit alleging NuVasive caused health care providers to submit false claims to Medicare and Medicaid for surgical methods not approved by the U.S. Food and Drug Administration (FDA).

The lawsuit further alleged NuVasive paid kickbacks to induce physicians to use the company’s products. Kevin Ryan was awarded a $2.2 million whistleblower cash reward for reporting the false claims and kickback allegations.

Sales Representative Alleges NuVasive Misrepresented Products and Provided Physician Kickbacks

Mr. Ryan, a former NuVasive sales representative, alleged that, from 2008 to 2013, the California-based medical device manufacturer marketed its CoRoent System approved for the surgical treatment of severe scoliosis and severe spondylolisthesis for uses unapproved by the FDA. This misrepresentation allegedly prompted a number of hospitals and physicians to submit ineligible claims for reimbursement to Medicare and other federal health care programs....

A podiatrist accompanied by nail salon workers offers free pedicures to seniors. Sounds like a great deal, right? But the foot doctor winds up billing Medicare for phantom foot surgeries.

An equipment supplier gives away free knee braces to seniors, but then bills Medicare for more expensive types.

These are just two examples of how fraud is driving up America’s healthcare costs, according to Jim Landers, a reporter for the Dallas Morning News. Such rampant abuse amounts to anywhere from a staggering $93 billion to $310 billion, or 3 to 10 percent of what the US spends on health care, he says.

No Cost to Patients?

Consumers are told by the charlatans that the goods and services they are getting will not cost them a thing. The reality is that they may not be paying anything at the point-of-purchase, but all the waste will result in increased Medicare premiums they have to shell out the following year. [break]...

Washington DC school district’s food vendor Chartwells has agreed to settle a DC False Claims Act whistleblower lawsuit at $19 million to resolve allegations that it overcharged the city for school food supplies. Whistleblower Jeffrey Mills will receive a portion of that settlement for exposing the alleged contract breaches in a not yet announced amount, typically 15 to 25% of the settlement. Mills urges school districts using private food vendors to inspect vendor contracts and performance.

Whistleblower Jeffrey Mills Alleges Chartwells Cost School District Millions

Jeffrey Mills, former Director of the Office of Food and Nutritional Services for the Washington DC school district, filed a whistleblower lawsuit against Chartwells and Thompson Hospitality, the group that provided food services for the district’s schools since 2008....