Qui Tam 101 » Medicare

Judge Gives Green Light to Johnson & Johnson Whistleblower Case

Nolan and Auerbach — Mon, 21 Mar 2011 15:24:03 +0000

A federal judge refused to dismiss an intervened qui tam action, which alleges Johnson & Johnson paid millions of dollars in illegal kickbacks to Omnicare, the nation’s largest nursing home pharmacy, for the purpose of driving up sales of its antipsychotic drug Risperdal.

According to the government’s complaint, Johnson & Johnson paid $50 million to Omnicare between 1999 and 2004 to get it to push Risperdal to elderly patients with dementia, and then hid those kickbacks as payments for services that Omnicare never actually provided. Omnicare then enacted intervention programs such as the “Risperdal Initiative” to persuade physicians to prescribe the drug to elderly dementia patients.

In an effort to derail the action, Johnson & Johnson argued that the so-called “illegal kickbacks” were actually legal rebates, permissible under the controlling Medicare regulations. However, after extensive briefing, Judge Sterns sided with the plaintiffs and denied Johnson & Johnson’s motion to dismiss.

This case was originally filed nearly eight years ago by an Omnicare pharmacist that was troubled by his employer’s business practices of accepting kickbacks from drug makers. Ultimately, he decided to take a stand and filed qui tam actions against Ominicare and several pharmaceutical companies.

In 2009, Omnicare settled the FCA allegations for $98 million, quieting claims that the company accepted kickbacks that were hidden as data fees, education fees and as payments to attend Omnicare meetings. However, Johnson & Johnson sought to silence the whistleblower’s action through the legal system. Now, with the government intervening in the action in 2010 and the court giving a green light to the action last week, Johnson & Johnson might be reconsidering options.

For more information about qui tam law and health care fraud, contact Nolan & Auerbach, P.A.

House Approves Anti-fraud Legislation

Nolan and Auerbach — Thu, 21 May 2009 18:50:37 +0000

U.S. Senator Chuck Grassley (R-Iowa) announced in a May 18, 2009 press release that The Fraud Enforcement and Recovery Act, introduced by Senators Patrick Leahy (D-Vt.), Grassley and Ted Kaufman (D-Del), had cleared Congress that day with an approval by the House of Representatives.

The senate unanimously passed the amended bipartisan legislation, according to the release, and the bill is now headed to the President’s desk to be signed into law.

To see the press release, go to iowapolitics.com

For more information about Qui Tam law and Health Care Fraud, contact Nolan and Auerbach, PA.

U.S. Joins Suit Against Renal Care Group Alleging False Billings to Medicare for Home Care Renal Dialysis

Nolan and Auerbach — Tue, 28 Aug 2007 14:54:45 +0000

Last month, the United States intervened in a qui tam lawsuit accusing Renal Care Group Inc. (RCG) and Renal Care Group Supply Company (RCGSC) of fraudulently billing Medicare. The suit alleges that RCG and RCGSC fraudulently billed for supplies and equipment provided to End Stage Renal Disease (ESRD) patients who received dialysis treatments at home. Both companies are owned by Fresenius Medical Care Holdings Inc. which was also named in the lawsuit.

Cost Report Fraud Allegations Cost Baptist Medical and Integris Health $12.2 Million

Nolan and Auerbach — Mon, 04 Dec 2006 15:30:12 +0000

A former contractor of Integris blew the whistle on Integris Health, Inc., alleging that it was submitting inflated claims to Medicare. The complaint stated that Integris sought payment from Medicare for post and non-transplant related costs that Integris knew were not reimbursable under the Medicare program. In addition,the Complaint alleged that Integris claimed Medicare reimbursement for liver and heart organ acquisition costs related to transplant patients who were not Medicare beneficiaries. The whistleblower will receive $2.3 million as a share of the recovery under the False Claims Act. Integris Baptist Medical Center, a not-for-profit health organization, is located in Oklahoma City, Oklahoma and operates the largest Medicare certified Heart, Liver and Kidney transplant program in the state of Texas. Integris Health, Inc. is the parent corporation for Integris Baptist Medical Center.

To read more on this article click here.

Stark Violations May Result in Exclusion of Tenet Hospital from Federal Programs

Nolan and Auerbach — Wed, 10 May 2006 16:34:44 +0000

The “Stark” statute, 42 U.S.C. §1395nn, is also known as the Physician Self-Referral Law or Section 1877 of the Social Security Act. The Stark law was intended to prevent physicians from profiting (actually or potentially) from their own referrals. The Stark statute acts prospectively, i.e., it prohibits relationships that have been demonstrated to encourage over-utilization. Because it is a strict liability statute, there is no need to show knowledge or intent.

Medicare and Medicaid programs depend on physicians and other health care professionals to exercise independent judgment in the best interests of patients. Financial incentives tied to referrals have a tendency to corrupt the healthcare delivery system in ways that harm the federal programs and their beneficiaries. Corruption of medical decision-making can result when a physician refers a patient to a provider on the basis of the physician’s financial self-interest instead of the patient’s best interests. Restrictions on the practice of self-referral exist at both the state and federal levels.

Medical directorships, interest free loans/forgiveness of debts, illegal recruitment arrangements and improper discounts in the form of professional courtesy, may represent additional financial windfalls to physicians, resulting in hospital referrals and a violation of the “Stark” statute. A Stark scenario may also be present when a hospital circumvents potentially compliant contracts by providing outside of what appear to be legitimate contracts, office space, renovations, equipment, furniture, housekeeping services, office supplies, copy and fax machines, telephone, utility and transcription services to referring physicians for free or less than fair market value.