News & Cases

Kentucky-based US WorldMeds LLC will pay $17.5 million to resolve allegations that it offered kickbacks to both doctors and patients to secure prescriptions of its drugs Apokyn and Myobloc, used to treat Parkinson’s disease. The prescriptions generated millions of dollars for the company in the shape of Medicare billings.

The multi-million-dollar settlement resolves a whistleblower lawsuit filed by two former employees of US WorldMeds, Dr. Bennett and Dr. Chinnapongse. Under the False Claims Act, the two relators stand to receive a shared award amounting to 15-25 percent of the total recoveries.

The whistleblowers quit their jobs immediately after the resolution of the lawsuit became public. According to a spokesperson for Dr. Chinnapongse, he is not only “a brilliant scientist,” but also “a deeply ethical doctor who stood up at great risk to do the right thing,” and, “precisely the kind of whistleblower that the False Claims Act is meant to reach.”...

Astellas, a pharmaceutical company, has just agreed to pay $100 million to resolve allegations that it illegally used charitable foundations to cover Medicare copays to boost sales of its drug Xtandi.

Because patients covered by Medicare are often required to make partial payments for prescription drugs, many foundations subsidize them. When pharmaceutical companies donate to those foundations, the practice may violate the Anti-Kickback Statute, which forbids drugmakers from incentivizing the purchase of their products.

Astellas is the maker of Xtandi, a drug used to treat prostate cancer. According to the government’s findings, Astellas directly asked two foundations to start two funds to assist prostate cancer patients with their copay obligations. The funds then began exclusively subsidizing the purchase of Xtandi by Medicare-covered patients. Meanwhile, Astellas was the only donor to the funds....

Sutter Health LLC, a nonprofit healthcare provider based in Northern California, and its affiliates, Sutter East Bay Medical Foundation, Sutter Pacific Medical Foundation, Sutter Gould Medical Foundation, and Sutter Medical Foundation, have agreed to pay $30 million to resolve allegations that they overcharged the Medicare Advantage program.

Individuals covered by Medicare can choose to enroll in the Medicare Advantage plan. The government healthcare program then pays so-called Medicare Advantage organizations (“MAOs”) a per-person amount to provide services to those Medicare beneficiaries. As the number of seniors who are opting into the Medicare Advantage plans increases, opportunities for this type of fraud also increase. Medicare Advantage offers additional benefits like dental care, eyeglasses, and fitness expense reimbursements.

Patients with serious diagnoses have a higher “risk score,” which determines the amount of Medicare Advantage’s per-person payments. According to the allegations resolved by the recent settlement, Sutter Health and its affiliates listed unsupported diagnoses for Medicare Advantage enrollees in order to increase billings....

Two SEC whistleblowers received a $50-million award for their role in exposing misconduct by JPMorgan Chase. The financial institution allegedly concealed information about conflicts of interest from its customers. This resulted in a $307 million settlement with the agency, which enabled the tipsters to receive $37 million and $13 million in whistleblower awards respectively.

Both whistleblowers have remained anonymous, as it is customary with individuals exposing fraud by financial institutions. It became known, however, that one of the tipsters (the one who received the $13 million reward) was once a high-ranking JP Morgan executive. It is not known whether he or she is still employed by the bank.

Financial institutions failing to disclose conflicts of interest to their wealth management customers is nothing new. The SEC whistleblower program has repeatedly succeeded in exposing this type of misconduct through the promise of anonymity, anti-retaliation protections, and sizable rewards for insiders willing to speak out....

A former Wheeling Hospital VP has filed a whistleblower lawsuit alleging his employer routinely paid kickbacks to physicians in exchange for patient referrals.

Whistleblower Louis Longo claims the hospital was struggling financially until it started paying kickbacks to physicians in exchange for patient referrals. The complaint mentions two specialists who received substantial financial incentives from Wheeling in violation of both the Stark Law and the Anti-Kickback Statute.

Because the kickbacks Wheeling paid resulted in Medicare and Medicaid beneficiary referrals, the hospital submitted false claims for payment to the government programs. This allowed Longo to file a suit under the False Claims Act. If the complaint is successful, he could receive a multi-million-dollar reward....

Duke University has agreed to pay $112.5 million to resolve allegations that it submitted fake scientific data to the government to secure research grants.

The alleged misconduct was brought forward in a whistleblower lawsuit filed by former Duke laboratory analyst Joseph Thomas. Under the False Claims Act, for his part in recovering misappropriated taxpayer funds, Thomas will receive a $33.75 million reward.

According to the suit filed by Thomas, a Duke researcher submitted bogus data as part of a series of grant applications, which resulted in lucrative financial aid from the government.

The research projects in question involved studying respiratory functions in mice. The complaint states that Duke researchers submitted false data to federal agencies, thus misrepresenting the results of their work....

Maryland-based MedStar Health and two of its affiliates have agreed to pay $35 million to the government to resolve allegations that they engaged in conduct that violated the Anti-Kickback Act.

The settlement resolves a lawsuit brought by three whistleblowers under the False Claims Act. MedStar’s two co-defendants are MedStar Union Memorial Hospital, and MedStar Franklin Square Medical Center, both based in Baltimore.

According to the complaint, MedStar Health paid kickbacks to Maryland-based MACVA, a cardiology group, in exchange for referrals of Medicare-covered patients in need of lucrative cardiac surgery. The kickbacks were allegedly disguised as contracts for services to be provided at the Union Memorial and Franklin Square hospitals. Eventually, the alleged scheme led MedStar to submit false claims for payment to Medicare....

Jon Mohatt’s whistleblower case – the one that resulted in Montana’s largest False Claims Act recovery ever - was kept a secret from defendant Kalispell Regional Healthcare System for five months. On September 25, 2018, the government opted to intervene in Mohatt’s case and unsealed the case.

As part of his qui tam claim, the former Chief Financial Officer for Kalispell Regional alleged that the hospital system violated the federal Stark Law and Anti-Kickback Statute by paying physicians to refer patients.

In all, Mohatt’s whistleblower claims resulted in a $24 million settlement. Mohatt collected a $5.4 million cash whistleblower award for his efforts in pursuing the claim....

Retail pharmacy giant Walgreen Co. will pay $60 million to settle claims that it overcharged Medicaid for prescription drugs. The alleged scheme was brought forward in a whistleblower lawsuit filed in 2012. This is the second settlement in that case, which involves alleged fraud against 39 states and the federal government.

The whistleblower, Marc Baker, was once a Walgreens pharmacy manager in Florida. Due to the nature of his work for the company, Baker was in a position to witness how the pharmacy chain knowingly offered illegal kickbacks to lure Medicaid-covered patients and overcharged government programs for prescription drugs. In January 2017, there was a first settlement relating to some of Baker´s allegations. As a result of that agreement, he received a $9.7 million whistleblower award. Now, following the new resolution, he stands to get an additional $12.6 million.

Upon the announcement of the settlement, a spokesperson for Baker commented, “This unprecedented case exemplifies the importance of whistleblowers in the public-private partnership to prevent government fraud. It illustrates the power of one individual to expose and stop fraud against the government – and, ultimately, U.S. taxpayers who foot the bill.”...

According to a report released by the DOJ in December 2018, False Claims Acts cases led to $2.88 billion in recoveries during the last fiscal year. A staggering 84 percent of them were initiated by whistleblowers, leading to 73 percent of the total of settlements and judgments, and amounting to $2.044 billion. As a result of these successful lawsuits, FCA whistleblowers received a total of $301 million in awards in 2018.

Nearly 9 out of every 10 cases filed during 2018 were related to healthcare fraud. The top recoveries from fraudsters in the sector included $625 million from AmerisourceBergen Corp., which allegedly, illegally repackaged cancer medication, deriving hundreds of millions in profits. A handful of massive settlements, five to be exact, including the one with AmerisourceBergen amounted to $1.5 billion of the total recoveries.

The largest healthcare fraud recoveries also included a $360 Million settlement with drug maker Actelion over kickbacks, one with Insys over opioid kickbacks, amounting to $150; another one, of $260 million, with hospital chain Health Management Associates over kickbacks and fraudulent billing; and one amounting to $270 million, paid by Medicare Advantage provider HealthCare Partners Holdings, for defrauding the program....