Healthcare and Pharma Cases

On Monday, November 16, U.S. Attorney Bill Nettles announced that the State of Florida and U.S. Attorney's Office for the District of South Carolina settled claims of health care fraud with four Florida hospitals Oak Hill Hospital, Regional Medical Center Bayonet Point, Trinity Hospital and West Florida Hospital, owned by Hospital Corporation of America. Whistleblower Kelly Oxendine was awarded a substantial $400,000 for her efforts in putting a stop to the alleged fraudulent billing...

Novartis AG has agreed to fork over $390 million to settle a False Claims Act lawsuit alleging the pharmaceutical company paid illegal kickbacks to increase sales of drugs covered by government-funded Medicare and Medicaid programs. Whistleblower David Kester brought the initial allegations to federal law enforcement for this and three other cases involving Novartis. The settlement is still pending final agreement by government authorities.

Former Novartis Sales Manager David Kester Alleges Specialty Pharmacy Kickbacks

Mr. Kester, a former Novartis sales manager, reported the initial allegations in a 2011 whistleblower lawsuit alleging the Basil, Switzerland-based company was offering specialty pharmacies improper rebates and discounts to boost sales of its anti-transplant rejection drug Myfortic. Novartis also allegedly devised a scheme to encourage refills of its iron chelating agent Exjade....

West Chester Hospital in Cincinnati, and its parent company UC Health, have agreed to pay $4.1 million in a False Claims Act settlement relating to claims they billed Medicare and Medicaid for medically unnecessary spine surgeries performed by Dr. Abubakar Atiq Durrani of Mason, Ohio. The original civil suit was filed by several of Dr. Durrani’s former patients under the qui tam provision of the False Claims Act.

Health Care Fraud: Unnecessary Spine Surgeries, Bills to Medicare

Abubakar Atiq Durrani is now considered a fugitive from the law and this settlement between the U.S. government and West Chester Hospital does not absolve Durrani of the criminal charges against him. According to the allegations in the lawsuit, Durrani performed millions of dollars’ worth of medically unnecessary spine surgeries between 2009 and 2013, which he then billed to federally funded health programs. Durrani was arrested and charged in July 2013 in connection with the allegedly unnecessary surgeries....

Broward Health, a large public hospital system in South Florida, has agreed to pay the U.S. government $69.5 million dollars to settle allegations of federal health care fraud. Broward Health was accused of violating the False Claims Act and the Stark Law by compensating physicians for referrals.

Dr. Michael Reilley Helps Recover $69.5 Million for Taxpayers

The allegations came to light in 2010 when Dr. Michael T. Reilley, an orthopedic surgeon based in Ft. Lauderdale, filed a whistleblower suit accusing Broward of paying doctors for referrals to their hospitals. Michael Reilley will receive $12 million as his portion of the settlement....

The nation’s second-largest nursing home pharmacy is again paying big to settle yet another False Claims Act lawsuit. Former Abbott Labs employee, Meredith McCoyd, filed the initial allegations claiming that the Louisville-based PharMerica Corporation used kickbacks to boost sales of an anti-seizure medication. Ms. McCoyd collected a $1 million cash whistleblower reward for bringing the allegations.

PharMerica Depakote Settlement Resolves Kickback Allegations

On Wednesday, the Department of Justice announced the $9.25 million settlement that partially resolves two lawsuits filed by former Abbott Laboratory sales representatives, Richard Spetter and Meredith McCoyd. The allegations claimed that, between 2001 and 2008, PharMerica filed false Medicare and Medicaid reimbursement claims and accepted kickbacks – including educational grants and rebates – in exchange for Abbott’s recommending that doctors prescribe the anti-epileptic drug, Depakote, to nursing home patients....

Nurses and former Guardian Hospice employees Rose Betts and Jennifer Williams will receive $510,000 of a $3 million settlement in a False Claims Act lawsuit stemming from accusations that the hospice billed Medicare for patients who were not actually terminally ill. Betts and Williams brought the initial suit in 2012, alleging that their former employer Guardian Hospice, a for-profit hospice in Atlanta, knowingly submitted false claims to Medicare, and pressured their employees to meet high quotas of new hospice patients, many of whom did not actually meet the requirements for end-of-life care.

In order to be eligible for hospice care under Medicare, a patient must be diagnosed with a terminal illness and have an estimated life expectancy of six months or less. Once hospice care commences, the patient receives palliative care intended to make their lives more comfortable and limit pain as much as possible. They no longer receive treatment for their actual illness, such as chemotherapy, which is highly problematic if they are not in fact terminally ill and still have the potential to recover from their illness with appropriate treatment.

Jennifer Williams & Rose Betts Alleged Recruited Patients Ineligible for Hospice

According to the allegations made by the whistleblowers and the U.S. government, Guardian Hospice deliberately recruited new patients who they knew did not need hospice care, in order to fraudulently collect Medicare payments. While Guardian Hospice did not admit guilt, as part of the settlement they will not only pay back millions in allegedly fraudulent Medicare payments, but will also pay for Betts’ and Williams’ legal fees as well as an additional $90,000 to resolve their wrongful termination claims. Betts and Williams allege they lost their jobs as retaliation for whistleblowing....

Florida-based Adventist Health System has agreed to pay $115 million to resolve allegations they provided physicians with patient-referral kickbacks in violation of the Stark Statute and False Claims Act. Three former North Carolina Adventist Hospital employees brought the initial qui-tam lawsuit in December 2012 and will share in a total whistleblower cash award of up to 30 percent of the total settlement amount.

Adventist Health System Allegations Include Kickback Schemes and Medicare Overbilling

After several years of attempting to stop referral bonuses and improper billings via internal channels, three former employees of Adventist’s Park Ridge Health in Hendersonville, North Carolina; risk manager Michael Payne, executive director of physician services Melissa Church, and physician’s office compliance officer Gloria Pryor, filed a whistleblower lawsuit alleging a system-wide kickback scheme that paid doctors for referrals in Florida, North Carolina, Tennessee and Texas....

Alive Hospice, Inc., a non-profit Tennessee hospice care provider, has agreed to pay the U.S. government more than $1.5 million to resolve allegations that they were overbilling Medicare and Tennessee Medicaid (TennCare) for hospice services. The allegations were initially brought in a claim lawsuit by whistleblower Linda Anderson, a former Alive Hospice triage nurse. Anderson collected a $263,197 whistleblower cash reward as her share of the settlement.

Alive Hospice Cashed In on Alleged Overbillings for Unqualified Patients

Medicare and Medicaid hospice benefits are offered to patients nearing the end of their lives. General inpatient hospice care services include symptom and pain management that cannot be achieved in the patient’s home. Reimbursements for general inpatient care services are set at a higher rate than routine home care or inpatient respite care services....

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....