False Claims-Qui Tam News

Harvard Law School professor Terri Gerstein writes that the case of the IC whistleblower is strangely familiar to her.

A worker learns of brazen violations of law and feels compelled to speak up. The boss and his buddies go bananas, demanding to know the worker’s identity, making veiled or explicit threats, disparaging the worker’s credibility…

Terri Gerstein

Gerstein is director of the State and Local Enforcement Project at the Harvard Law School Labor and Worklife Program. Writing in The American Prospect, she describes what she’s seen in her years of enforcing workplace laws: A fast food is worker fired after reporting a gas leak to the fire department. An airport skycap reported fired the day after appearing at a press conference about minimum wage violation. Countless examples of workers being pressured to stay quiet about sexual harassment.

These examples point to the need for better protections for workers who report serious illegality. The focus on these high-profile whistleblowers should be a catalyst for strengthening whistleblower laws in general, which are currently a patchwork.

Protections vary from statute to statute and from state to state. Ideally, these laws would include strong protection against retaliation; confidentiality; standing for whistleblowers to bring their own lawsuits; and finally, incentives for coming forward. These goals are not unrealistic; the False Claims Act, for example, allows people reporting fraud against the government to file their own lawsuits. The Securities and Exchange Commission and the Internal Revenue Service have paid millions of dollars to whistleblowers who have provided original information leading to successful enforcement actions.
Continue Reading

Sen. Chuck Grassley believes the Department of Justice has moved to dismiss false claims cases without considering the merits or conducting cost-benefit analyses.

In a September 4 letter to Attorney General William Barr, Grassley writes that he is concerned about the DOJ’s “efforts to dismiss greater numbers of qui tam  (false claims) cases for reasons that appear primarily unrelated to the merits of individual cases. Those efforts rely at least in part on vague and at times questionable concerns over prerogatives or limited government resources to handle the cases.”

The Iowa Republican notes that such actions “could undermine the purpose of the False Claims Act by discouraging whistleblowers and dismissing potentially serious fraud on the taxpayers.”

Grassley and others have raised concerns about the increase in the DOJ’s motions dismiss cases brought on the government’s behalf. The change follows the emergence of the 2018 Granston memo, which recommended government dismissal of whistleblower cases that were costly or lacked merit.
Continue Reading

The AARP calls Medicare’s coverage of medical devices “a boon to beneficiaries but also a big draw for fraudsters, who exploit older Americans’ health care concerns to enrich themselves.” This week’s Modern Healthcare offers a piece that argues a recent False Claims Act case involving medical device kickbacks to doctors “illustrates an increasingly tenuous arrangement that may spur more whistleblower cases.” The piece also appeared Crain’s Chicago Business. 

The story refers to a July case where  the FBI, the Department of Health and Services and the Department of Justice joined in the whistleblower suit against spinal implant company called Life Spine. The feds charge that the company paid doctors to use their devices. The kickbacks included “millions of dollars of consulting fees, royalties, and intellectual property.”

In a release on the case, Manhattan U.S. Attorney Geoffrey S. Berman said: “Kickbacks to doctors can alter or compromise their judgment about the medical care and services to provide to patients,and can increase healthcare costs. This office will continue to hold companies and the people who run them accountable when they make improper payments to doctors.”

Life Spine tells Modern Healthcare in a statement “that both parties are engaged in discussions and look forward to resolving the matter.”


Continue Reading

Whistleblowers are playing a key role in revealing Medicare kickback schemes disguised as so-called patient assistance programs. In April, five separate pharmaceutical companies paid a total of $247 million for running such programs. This week, a new qui tam suit was unsealed.

Kaiser Health News offers a round up on the case:

The American Kidney Fund is supposed to help patients pay for health insurance premiums and other costs for treatment based solely on a patient’s financial need, and not favor companies that donate to it. But a new whistleblower lawsuit claims the charity created a so-called blocked list of dialysis clinics whose patients would not get financial assistance while it made sure patients at clinics operated by DaVita and Fresenius would.

The story notes that the Department of Justice declined to join the case. The lawsuit makes many of the same claims outlined in a 2016 New York Times series. Here’s what the Times reports on the new developments:

The lawsuit, filed by David Gonzalez, who worked for 12 years at the kidney fund in its patient assistance program until he left in 2015, accused the charity of creating a so-called blocked list of dialysis clinics whose patients would not get financial assistance while making sure patients at clinics operated by DaVita and Fresenius would…
Continue Reading

Medicare and Medicaid are the deep pockets of the federal budget, paying out nearly $1 trillion in 2018. So, it’s no wonder the programs are targets for fraudsters. Some steal from the sick. Some steal money meant to soothe the dying.

So, a new Department of Health and Human Services report on poor quality hospice care is a reminder: Whistleblowers, who have helped expose hospice billing fraud under the False Claims Act, may also have a role in ensuring quality care. It is essential to protect the False Claims Act to target cases of Medicaid or Medicare fraud.

Increasingly, billing for substandard care is considered a form of fraud, attorney Nina Zhang wrote on the American Bar Association website in March.

The False Claims Act (FCA) has emerged, for better or for worse, as a quality enforcement tool. With quality of care as an ever-moving target by the federal government (with the constant development of new quality measures), the FCA has faced its share of criticism as too blunt of an instrument to regulate quality of healthcare, a matter that many argue is better left to the states under their police power…However, it can be argued that since the federal government is the biggest buyer of healthcare, it thus has a stake in how its monies are used.”

Whistleblower hospice cases generally involve care that was not needed or never delivered. In June, a Los Angeles doctor was charged in a $33 million fraud scheme that involved hospice care. Last year, a nurse blew the whistle on a for-profit hospital chain. Caris Healthcare agreed to repay $8 million for submitting hospice bills for patients who were ineligible for the because they were not terminally ill. Sometimes billing and quality of care are intertwined. In a 2018 Texas case, a doctor told an informant that the way you make money on hospice patients “is by keeping them alive as long as possible.”


Continue Reading

The Department of Justice announced last week that Encompass Health Corporation, formerly known as HealthSouth Corporation, has agreed to pay $48 million to resolve allegations that it was enrolling patients in its program and charging Medicare whether they would benefit from rehab or not. The DOJ called the company nation’s largest operator of inpatient rehabilitation facilities.

The qui tam cases were brought by a former company physician in Florida, the head of therapy at a Texas facility and the medical director at a Virginia hospital.

From the DOJ press release:

The government alleged that beginning in 2007, in order to ensure compliance with Medicare’s rules regarding classification as an (inpatient rehabilitation facility) IRF, and to increase Medicare reimbursement, some Encompass IRFs falsely diagnosed patients with what they referred to as “disuse myopathy” when there was no clinical evidence for this diagnosis. Additionally, Encompass IRFs allegedly admitted patients who were not eligible for admission to an IRF because they were too sick or disabled to participate in or benefit from intensive inpatient therapy.


Continue Reading

Citizens and activists can help stop environmental crime, but they need to know which laws apply, how to collect evidence and when to get a lawyer.

Different approaches to the role of citizens in collecting and reporting evidence of environmental crime were discussed last week by a three panelists at the Environmental Law Institute in Washington, DC.

In many cases, there is no meaningful law enforcement to stop environmental crimes. That’s where citizens can come in.

By understanding how to collect evidence and navigate whistleblower programs, anyone can help enforce environmental laws. Anyone includes, NGO staff, those impacted by crime or insiders, such as cruise ship crews.

John Kostyack, director of National Whistleblower Center, talked about a range of existing federal laws with provisions that reward citizens who come forward with credible information about environmental crime.  Shaun Goho of the environmental law clinic at Harvard Law School talked about how the courts are likely to interpret evidence and expert testimony. Stevie Lewis of the Public Laboratory for Open Technology and Science said the EPA has been slow to act on the recommendations in a 2016 report on promoting citizen science. But, her group hasn’t.

Kostyack started his talk with a slide of a small, endangered porpoise known as the vaquita, according to a video of the event.

“It’s really a fitting symbol of what we’re up against,” he said. “The forces that are driving this beautiful animal to extinction in its home in the Gulf of California are the same forces that are driving much of the environmental devastation around the world and those are the forces of crime.”


Continue Reading

Medicine is a profession with high ethical standards. At the same time, there is much money to be made. Bad players find ways to siphon some of the nearly $600 billion we spend on Medicare each year. So, both the health care industry and its regulators constantly struggle with how to cope with the kickbacks, conflicts of interest and billing for unnecessary care.

Illustration by Nora Valdez

Last year, $2.5 billion of the $2.8 billion in Department of Justice False Claim Act recoveries involved the health care industry. In 2019, whistleblowers working with the DOJ included hospital administrators, sales representatives, home health care workers, physicians and patients.

Now, they may have more muscle. Maria Durant, a partner with the firm Hogan and Lovells, told a group of lawyers gathered in Boston last week there has been a major shift in the way courts interpret the validity of medical opinion. She spoke at a conference on health care law held Thursday by the Boston Bar Association. 
Continue Reading

For a hospital that had once labored to break even, Wheeling Hospital displayed abnormally deep pockets when recruiting doctors.

To lure Dr. Adam Tune, an anesthesiologist from nearby Pittsburgh who specialized in pain management, the Catholic hospital built a clinic for him to run on its campus in Wheeling, W.Va. It paid Tune as much as $1.2 million a year — well above the salaries of 90% of pain management physicians across the nation, the federal government charged in a lawsuit filed this spring.

In addition, Wheeling paid an obstetrician-gynecologist a salary as high as $1.3 million a year, so much that her department bled money, according to a related lawsuit by a whistleblowing executive. The hospital paid a cardiothoracic surgeon $770,000 and let him take 12 weeks off each year even though his cardiac team also routinely ran in the red, that lawsuit said.

Despite the losses from these stratospheric salaries and perks, the recruitment efforts had a golden lining for Wheeling, the government asserts. Specialists in fields like labor and delivery, pain management and cardiology reliably referred patients for tests, procedures and other services Wheeling offered, earning the hospital millions of dollars, the lawsuit said.
Continue Reading

The Department of Justice announced Thursday that two pain management clinics in northern Virginia have agreed to pay approximately $3.3 million to settle Medicare fraud allegation brought by a qui tam whistleblower.

The settlement resolves allegations that National Spine and Pain Centers (NSPC), and Physical Medicine Associates (PMA) fraudulently billed Medicare and other federal healthcare providers. The programs charged for physician services that were delivered by nurse practitioners. The case also involved the ordering medically unnecessary urine drug tests. The whistleblower was former PMA physician assistant.

The case follows news of whistleblower lawsuits moving forward against a Tennessee-based chain of pain clinics for a similar scheme.
Continue Reading