Articles Posted in False Claims Act

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The Department of Justice wasted no time in showing that its new policy of going after individuals, not just companies, engaged in fraudulent conduct was for real.  (See, Blog post DOJ to Focus on Individual Accountability for Corporate Fraud.) Late last week, October 29, 2015, the government charged the former president of a subsidiary of Warner Chilcott PLC, a pharmaceutical division, with conspiracy to violate the Anti-Kickback Statute.  This is an important step in holding individuals accountable for the conduct of business units for which they are responsible.

For too long, companies could engage in fraudulent conduct only to pay a hefty fine, with the individuals responsible for the fraud suffering little or no consequences and often reaping the benefits of their unlawful conduct with increased pay and bonuses.  If a company faced a significant fine, or debarment from a government program, which impacted the company’s earnings, the only people likely to suffer were its shareholders.  Investor Bill Ackman said that drug companies get sanctioned all the time, but that does not mean that they are bad investments.  According to Ackman, the $390 million Novartis settlement was just the cost of doing business.   (See, Bloomberg.)

Engaging in fraud should never be a conscious business decision.  Holding individuals responsible will hopefully, deter this type of conduct.

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DOJ to Focus on Individual Accountability for Corporate Fraud

The U.S. Department of Justice announces that holding individuals accountable for corporate fraud is a top priority. In a seven-page memorandum, released September 9, 2015, Deputy Attorney General Sally Quillian Yates, announced new guidelines focusing on individual accountability for corporate misdeeds.

The Memorandum states that focusing on individuals is one of the most effective ways to deter corporate wrongdoing. Holding individuals accountable will deter further wrongdoing and encourage a corporation to change its culture and behavior, it will also further promote the public’s confidence in the justice system. Continue reading

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man-with-a-megaphone-1-1378633-sChicago – The False Claims Act places several restrictions on a person’s ability to pursue a qui tam case on behalf of the government. One of these restrictions is known as the “public disclosure bar”. The definition of public disclosure was recently addressed in the case of United States, et al. v. Whipple, et al.

In Whipple, the plaintiff alleged that the defendant hospital violated the False Claims Act by knowingly submitting false of fraudulent claims to Medicare and other federally funded health care programs. The relator alleged that the hospital submitted fraudulent claims for inpatient care which should have been billed as outpatient, observation services for same day surgery claims, inpatient admissions for renal-dialysis claims, and for carotid artery stenting without authorization. The relators asserted that he discovered these frauds while working for defendant in 2006.

The relator also claimed that he was unaware of a government audit and investigation against defendant for improper billing of Medicare by defendant. In fact, the government opened an administrative investigation in February 2008 which was resolved in September 2009 after defendant refunded $477,140.42 to the government. Continue reading

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Chicago – In a case that has been before the Court of Appeals for the third time and before the United States Supreme Court twice, the relator appealed the district court’s dismissal of her qui tam case based on the False Claims Act’s public disclosure bar.  Fortunately, for the relator, the Court of Appeals reversed.  United States ex rel. Wilson v. Graham County Soil & Water Conservation District, (4th Cir. Feb. 3, 2015)

The facts of the case begin in February 1995, when a storm caused flooding and erosion in North Carolina.  The United States Department of Agriculture agreed to help through a program known as the Emergency Watershed Protection Program.  The Graham County Soil & Water Conservation District, the Defendant, was responsible for to managing the Emergency Watershed Protection Program.

Karen Wilson, a part-time secretary at Graham County SWCD, and the relator reported her suspected misconduct to the USDA.  The USDA report created in response to Ms. Wilson’s allegations was distributed to several state and federal law enforcement agencies with a warning not to distribute the report outside of your agency without the approval of the USDA.

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Every once in a while, I ask myself why am I a False Claims Act lawyerambulance-1334534-m.  False Claims Act cases are difficult to win, partly because the government only intervenes in a small percentage of the qui tam cases filed, leaving the majority of cases to be litigated by the whistleblower and his or her attorney, without the real party in interest, the United States, being directly involved and active in the case.  These non-intervened cases only account for about 4% of all False Claims Act recoveries.

But whenever I get a phone call, an email, or a referral from another lawyer for a whistleblower case, I still get excited about the prospect, the potential, for a meaningful False Claims Act case that will right a wrong, and bring a significant financial reward to my client. 

Last week, the Justice Department announced that Saint Joseph Health System Inc, agreed to pay the United States $16.5 million.  According to the government, doctors at St. Joseph were performing pacemaker surgeries, coronary artery bypass surgeries, and diagnostic catheterizations, all on patients who did not need these procedures, simply for financial gain.  Here we are not talking about a doctor padding the bill, by billing for a 40 minute office visit when it only took 20 minutes, we are talking about doctors and a hospital knowingly, intentionally, performing invasive cardiac procedures just to make some more money with absolutely no thought or care for their patients’ well-being.  This is why whistleblowers perform such an essential and necessary role in our efforts to uncover and stop fraud, waste, and abuse, and in this case real harm being done to patients. Continue reading

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medical-doctor-1314902-sThe United States Government recovered $4.9 billion in fiscal year 2012 and total of almost $39 billion in qui tam and non-qui tam false claims act cases since October 1, 1987.  These recoveries are part of the Government’s focus on eliminating fraud, waste, and abuse and are in part a direct result of the use of Health Care Fraud Prevention and Enforcement Action Teams (HEAT), which are a joint effort on the part of the Department of Justice (DOJ) and the Department of Health and Human Services (HHS).  Most of the money recovered from health care fraud is returned to the Medicare Trust Fund, the treasury and other agencies. 

The Health Care Fraud and Abuse (HCFAC) Program is a joint DOJ and HHS initiate to coordinate resources from federal, state and local entities to fight health care fraud, waste, and abuse.  The government is also using newly created tools, authorized by the Affordable Care Act, including data sharing across multiple government agencies, more aggressive efforts to recovery overpayments, and the increased oversight of private health insurance frauds.  These authorizations under the Affordable Care Act, allowed HHS and the Centers for Medicare and Medicaid Services (CMS) to screen 1.5 million Medicare enrolled providers through the Automated Provider Screening system that identifies ineligible providers and potential frauds.  This simple screening process identified and removed 150,000 ineligible providers from the Medicare system.  These Medicare Fraud Strike Force Teams use sophisticated data analysis to identify potential areas of fraud as well as identifying new or emerging fraud schemes.  In 2012, the Department of Justice opened up about 1,000 criminal health care fraud investigations, involving over 2,000 defendants along with over 800 new civil investigations.

In 2013, there were 93 new non-qui tam false claims act cases filed and 753 qui tam False Claims Act cases filed by relators or whistleblowers.  In 2013, non-qui tam case settled or obtained judgments of $829,912,477 while qui tam False Claims Act cases in which the Government intervened settled or obtained judgments of $2,870,141,363.  Judgments or settlements in non-intervened qui tam cases resulted in $127,795,019.  HHS, or health care fraud  related False Claims Act cases resulted in $2,676,997,834 and Department of Defense related False Claims Act cases resulted in $712,773,336 in settlements or judgments for FY 2013.  The majority of False Claims Act cases are filed by whistleblowers and the vast majority of moneys recovered are from cases in which the United States intervened or otherwise pursued the action. 

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The False Claims Act case against Lance Armstrong is the focus of an article in the Chicago Daily Law Bulletin with numerous quotes from Chicago False Claims Act attorney Michael C. Rosenblat. Lance Armstrong

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For Immediate Release: January 8, 2013

Qui Tam False Claims Act Lawsuit filed by Jennifer Perez

On January 8, 2013, Attorney General Eric T. Schneiderman announced a $2.4 million settlement against Stericycle, Inc., one of the largest medical waste disposal companies in the United States, for overcharging nearly 1,000 New York government entities. The lawsuit which was filed by Jennifer Perez, a former employee of Stericycle, in Federal Court in Chicago in 2008 and was amended on June 28, 2010 to add the State of New York as a plaintiff and state a claim for relief under the New York False Claim Act.

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ral agencies and 45 third parties. The government has four lawyers on the case. Hiring of lawyers by DOJ lags behind steep increase in False Claims Act cases

via Justice Department gets long extension to perform e-discovery duties that Honeywell says it abysmally failed.