False Claims / Qui Tam

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

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

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

Duke University reported in January that its scientists won $384.6 million last year from the National Institutes of Health, “ranking 9th in the country among universities, research institutions and teaching hospitals that are awarded the taxpayer-based research dollars.”

This week, they had to give some of it back.

Duke has agreed to pay $112.5 million to the U.S. Government to settle a suit brought by a whistleblowing lab tech. The case involves another research technician who fabricated data from 2006 to 2013. The findings were used in applications for some of those NIH-funded studies.

The government investigation began after Joseph M. Thomas brought a qui tam case under the False Claims Act. Thomas’s share of the settlement will be $33,750,000.

The Justice Department announcement quoted U.S. Attorney Matthew G.T. Martin saying that taxpayers expect federal grant dollars will be used honestly.

“Individuals and institutions that receive research funding from the federal government must be scrupulous in conducting research for the common good and rigorous in rooting out fraud,” the statement notes.  “May this serve as a lesson that the use of false or fabricated data in grant applications or reports is completely unacceptable.”
Continue Reading

Title page Supreme Court case 18-31`5Members of the Supreme Court are skeptical of interpreting the statute of limitations in False Claims Acts cases in a way that would “help fraudsters,” according to attorney Stephen M. Kohn, who attended arguments today in a key False Claims Act case.

Kohn is author of an amicus brief in the case submitted on behalf of the National Whistleblower Center. A decision in Cochise Consultancy, Inc. v. United States, will determine the statute of limitations window for False Claims Act (FCA) cases when the government declines to intervene.

“The Justices appeared to understand the purpose of the False Claims Act is to help the government uncover fraud and were skeptical of interpreting the statute of limitations in a manner that would help fraudsters,” Kohn noted

More from Kohn’s report:

Demonstrating the Courts understanding as to why Congress would have wanted a longer statute of limitations when the relator moves a False Claims Act case forward, even without the government, Justice Sotomayor noted that, “in qui tam the recovery in bulk goes to the government.”
Continue Reading

The Supreme Court is scheduled to hear arguments on Tuesday in Cochise Consultancy, Inc. v. United States, a case that will determine the statute of limitations window for False Claims Act (FCA) cases when the government declines to intervene.

At issue: How should the statute of limitations apply in a qui tam suit in which the United States declines to intervene? Does the three-year limitations period begin to run from the date of the whistleblower’s knowledge of the alleged false claim? Or does it begin on the date of the government official’s knowledge of the alleged false claim?

The case revolves around whistleblower Billy Joe Hunt. In 2013, he filed a qui tam case alleging fraud by his former employer, a war contractor performing munitions clean-up work in Iraq in 2006. The government declined to intervene in Hunt’s case and it was dismissed by a district court. The Eleventh Circuit then allowed the case to go forward ruling that the FCA’s three-year limitations period was triggered by the government’s knowledge of the alleged fraud—not the whistleblower’s knowledge.

Those arguing in support of the Eleventh Circuit ruling include the federal government and a 20-state coalition. An amicus brief filed on the coalition’s behalf by the Indiana attorney general argues that the states have a “strong fiscal interest in ensuring the False Claims Act (FCA) provides adequate time to investigate, prepare, and file FCA claims.”


Continue Reading

The False Claims Act (FCA) has long served as a powerful weapon against fraud and waste in government programs, from rancid Civil War rations to Medicare scams. The Department of Justice (DOJ) recovered $2.88 billion under the law last year, with whistleblowers involved in the majority of cases.

March 2 marks the anniversary of the law, which was signed in 1863 by President Abraham Lincoln. After the Civil War, the FCA continued to identify military contractors guilty of mismanagement and fraud. With rising health costs, much of it covered by Medicare, most cases now involve medical providers and suppliers. The DOJ’s December report noted that $2.5 of the $2.8 billion in recovery involved the health care industry. The first line of a story in the trade publication Modern Healthcare reports “Healthcare industry groups have always hated False Claims Act whistleblower lawsuits.”


Continue Reading