AmeriGroup and CoxHealth Settle FCA Cases -- Big Fraud Recovery for US Taxpayers

Posted on July 23, 2008 by Marshall Chriswell
Two False Claims Act Settlements were reported yesterday, totaling approximately $280 million in fraudulently obtained government contract money that is now being returned to the US taxpayers.


  • Health insurance giant Amerigroup has settled with the governments of the United States and the State of Illinois, agreeing to pay $225 million plus legal fees. Amerigroup was exposed by whistleblower Cleveland Tyson, who was the company's Government Relations executive. He brought the suit in 2002, which went to trial, where, according to a press release issued by his attorneys:

    "...the jury found that Amerigroup deliberately avoided enrolling recipients with costly health conditions or who were pregnant and in their third trimester. These actions were taken while Amerigroup received IDPA payments calculated on Amerigroup providing healthcare to all enrollees."

  • CoxHealth, a large non-profit hospital chain in the Springfield, MO area, has announced a $60 million FCA settlement stemming from allegations of "improper Medicare billing and questionable business relationships."


The False Claims Act is the most effective whistleblower law on the books, as these settlements show, but it has been eroded in recent years by negative court decisions, such as  Allison Engine Co., Inc. v. United States, ex rel. Sanders. To counter these decisions, Senator Charles Grassley and other Congressional leaders have introduced a bill to amend the FCA. Most recently, the bill was approved by both the Senate and House Judiciary Committees.

 
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False Claims Act Correction Act (HR.4854) Approved by Committee

Posted on July 17, 2008 by Marshall Chriswell
Yesterday the House Judiciary Committee approved legislation to amend the False Claims Act, sending the measure along to be voted on by the full House of Representatives. Companion legislation (S.2041) was passed by the Senate Judiciary Committee in April.


The False Claims Act Corrections Act will help undo some of the damage that has been done to the FCA in recent years by poor judiciary decisions, such as Allison Engine v. US.


I will post the full text of the approved language as soon as it becomes available.
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Washington Post Reports That Hundreds of Contracting Scandals are Not Being Investigated

Posted on July 3, 2008 by Tony Munter
If you do the math on a Washington Post story yesterday it turns out the paper reported on what amounts to 225 scandals.

The Justice Department told the Post there is a backlog of approximately 900 False Claims Act cases, and that the backlog could take years to unclog. Obviously the time involved can damage the ability to pursue even the most meritorious cases. Justice also told the Post that they reject about 75% of all filed FCA cases, and most of those have little merit. I would bet that quite a few of the cases rejected have some merit but why quibble over that? If there are 900 cases in the system and a quarter represent cases that should be pursued, that means there are 225 good cases of fraud stuck in a black hole. Continue Reading...
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