The settlement agreement here falls squarely within § 3730(c)(2)(B): the government reached an agreement with the defendant to “settle the action . . . notwithstanding the objections of the person initiating the action.” In that circumstance, the statute required the district court to “determine, after a hearing, [whether] the proposed settlement [was] fair, adequate, and reasonable under all the circumstances.” 31 U.S.C. § 3730(c)(2)(B)

Id. at 10.

In turn, the D.C. Circuit followed the mandates of Congress and determined that it could not simply tune out the voiced concerns of the relator when it comes to adequacy of a False Claims Act settlement.

As for the constitutional concerns, the D.C. Circuit noted the courts regularly play a role in scrutinizing settlement agreements. For example, in the criminal context, under Federal Rule of Criminal Procedure 48(a), the government can only “dismiss an indictment, information, or complaint” “with leave of the court.” Moreover, the Court noted that in this particular case, the government invoked the court’s supervisory powers by urging the district court to “retain jurisdiction to . . . enforce the terms of the settlement agreement by and between the parties.”

More information for healthcare fraud whistleblowers is located at the Nolan & Auerbach, P.A. website.

Recently, the First Circuit had an opportunity t apply its renewed reading of “false or fraudulent” statements, in United States ex rel. Jones v. Brigham and Women’s Hospital, No. 10-2301 (1st Cir. May 7, 2012). In this Medicare fraud case, the defendants allegedly violated the False Claims Act by including false statements in a grant application that was submitted to the NIH. Importantly, at least from the defendants’ point of view, the application did not include the supposed false data that formed the basis of their study proposal.

In reversing the lower court’s decision, the First Circuit ruled that the statements in the grant application were still sufficiently “false” to trigger FCA liability. According to the Court, “Although it is true that the allegedly false [ ] data was not itself included in the Application, that fact is not determinative of the false claim allegation. The statute makes it a violation to ‘use . . . a false record or statement to get a false or fraudulent claim paid or approved by the Government.’ 31 U.SC. § 3729(a)(2).”

In a sense, the underlying false data tainted the subsequent statements in the grant application. The court noted, “These statements rel[ied] on the data challenged by [the Relator] as false. In the language of the FCA, they ‘use[d] . . . a false record.’ Thus premised, the statements would not be ‘true, complete and accurate’ as required by the certifications signed” by the Defendants.

The Court stressed that the relator would still need to clear two other FCA elements—materiality and knowledge. However, the “falsity” element was sufficiently pled, even if the allegations did not neatly fit into an “express certification” or “implied certification” box.

More information for whistleblowers is located at the Nolan & Auerbach, P.A. website.

Since the False Claims Act was modernized in 1986, the federal government has used the Act to return over $30 billion to the US Treasury. Attorney General Holder noted that of that figure, $20 billion in recoveries were reported as the result of qui tam whistleblower actions, including Medicare fraud and Medicaid fraud.

Assistant Attorney General West highlighted the tremendous recent success of the Act, which was recently updated in 2009. Specifically, West noted that over 25% of all dollars recovered under Act have been realized since 2009. Notably, during this three-year span, 84% of the recoveries were the result of whistleblower-initiated False Claims Act actions.

Senator Leahy and Congressman Berman, co-sponsors of the recent False Claims Act Amendments of 2009, echoed their support for the Act’s public-private partnership. They encouraged the audience to continue the fight against government fraud, especially as the country faces mounting fiscal concerns.

More information for healthcare fraud whistleblowers is located at the Nolan & Auerbach, P.A. website.

Under 31 U.S.C. 3731(b), the statute of limitations for the False Claims Act provides that a civil action may not be brought more than six years after the date on which the violation is committed or more than three years after the date when facts material to the right of action are known or reasonably should be known by a Department of Justice official charged with responsibility to act, whichever occurs last.

Most of the confusion surrounding this statute of limitations language involves the application of the three-year tolling provision. This uncertainty recently played out in a Middle District of Tennessee courthouse, where the government attempted to use the tolling provision to reach actions from the late 1990s.

In this case, United States v. Carrell, No. 3:09-cv-00445 (M.D. Tenn. Dec. 19, 2011), the court denied a defendant’s summary judgment motion, for there were genuine issues of material fact as to when the government knew or should have known that eight cost reports from a home health management company were false or fraudulent.

Medicare reimburses the total amounts that a home health management company charges in cases involving unrelated parties, but for related parties Medicare reimburses only the management company’s actual costs, without profits. Here, the government alleged that the defendants submitted false and fraudulent claims in their 1999, 2000, and 2002 cost reports to Medicare because it failed to disclose the related party status of their home health agencies and the management company that provided services to those agencies.

The defendants maintained that the government’s related party allegations were known to it as far back as 1989 and were repeatedly investigated and pursued by government agents. For example, the defendants alleged, the fiscal intermediary received an anonymous letter in 1989 that raised the possibility of Medicare fraud with regard to the ownership and operation of their home health care agencies.

The court, in rejecting this argument, found that the material fact of which the government needs to be aware prior to taking any action was not simply the alleged related party relationship, but the filing of fraudulent and falsified cost reports that failed to disclose the relationship. According to the court, this information was not fully revealed to the government until the government’s fiscal intermediary conducted a comprehensive final audit of the cost reports and issued a written notice of program reimbursement (NPR). Here, the first NPR was not issued until 2004 and the remaining cost reports were not suspended until 2009. Thus, the court concluded that genuine issues of fact remained as to when the government knew or reasonably should have known that they were false and/or fraudulent.

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

The most common mistake involves courts overlooking the “pending” language found in 31 U.S.C. 3730 (b)(5). The False Claims Act only bars qui tam actions when a separate, related qui tam case, based on the same facts, is still “pending.” By removing “pending” from the first-to-file bar, courts have permitted previously dismissed, barebones allegations to derailed later-file meritorious suits.

Recently, however,in United States ex rel. Sonnier v. Allstate Ins. Co., Civ. No. 09-1038-JJB (M.D La. Jan. 10, 2012), a Louisiana district court correctly read the Act, when it determined that earlier-filed qui tam suits do not trigger the first-to-bar unless the earlier actions were still pending when the later qui tam suit was filed. Other courts would be well-served to review this decision before instinctually triggering the first-to-file bar.

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

Thankfully, federal and state False Claims Acts provide a viable avenue for exposing fraud. By deputizing private citizens, the qui tam provisions of the False Claims Act empower individuals in their fight against corporate fraudsters.

A recent $70 million False Claims Act settlement involving New York City is a perfect example of why we need the False Claims Act. In this case, Dr. Gabriel Feldman, a board-certified preventive medicine physician, was employed by the New York County Health Services Review Organization (NYCHSRO) as a local medical director, and he was tasked with determining whether Medicaid patients qualified for 24-hour personal care services (PCS) under Medicaid’s PCS program. However, time and time again, the City of New York overruled his PCS determinations, improperly authorizing PCS for thousands of New York Medicaid beneficiaries.

Since 1993, Dr. Feldman voices his concerns, both internally and externally. For example, Dr. Feldman testified publicly before the New York City Council in 1993, stating that the City’s PCS program was causing the government to make unjustified payments representing, “…hundreds of millions of dollars in Medicaid waste.”  He also complained repeatedly to his supervisors at the NYCHSRO. However, each time, his concerns fell on deaf ears.

Finally, in 2009, Dr. Feldman filed a qui tam action against the City, laying out the allegations of fraud and detailing the City’s complete disregard for the applicable Medicaid regulations.

Recently, the City of New York finally listened, when it inked a check for $70 million. For his courageous efforts, Dr. Feldman received a handsome reward of $14.5 million.

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

So, how did such a small army of fraud-fighters recover such a notable sum in 2010? First, most of the recoveries are led by the federal government and their component agencies, such as the FBI, HHS-OIG, and the FDA. Further insight is available if you dissect the numbers on a state-by-state basis.

Notably, some states with large Medicaid budgets were substantially less successful in recovering stolen Medicaid dollars. For example, even though Pennsylvania had the fourth largest Medicaid budget, of nearly $20 billion, it only ranked eighteenth in the nation in Medicaid recoveries, securing a measly $29 million in civil recoveries. Tennessee, on the hand, had less than half the Medicaid expenditures, at $8 billion per year, but the state ranked sixth in the nation in recoveries with over $70 billion in civil recoveries.

At first glance, the size of a state’s MFCU staff seems to be the deciding factor. For instance, the three largest MFCU staffs belonged to the three most successful states in recovering Medicaid dollars—New York, Florida and California. However, these three states had the largest pool of funds to guard and, therefore, the greater chance to siphon out fraudulent dollars. Indeed, when you calculate the dollars recovered per MFCU staff member, these three states do not even appear in the top twenty.

States with False Claims Acts recover substantially more stolen Medicaid dollars. Indeed, eight of the top 10 states and twelve of the top 15 states have False Claims Acts. Conversely, six of the bottom 10 states and ten of the bottom 15 states do not have False Claims Acts. Seemingly, State False Claims Acts are a major factor in recovering funds from Medicaid fraudsters.

States with False Claims Acts efficiently and effectively fight Medicaid fraud because they leverage the resources and inside information of whistleblowers, and are able to participate in federal investigations and prosecutions. While other States are looking for the proverbial “needle in the haystack,” states with False Claims Acts are able to participate in federal prosecutions, and also independently zero in on fraudulent schemes that drain their limited Medicaid dollars. In return, MFCUs are better able to protect Medicaid dollars and whistleblowers are able to receive substantial rewards. This public-private partnership accounts for over half the $1.84 billion recovered by MFCUs in 2010.

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

This alleged business practice emerged in a recently settled False Claims Act action against Guidant LLC, a subsidiary of Boston Scientific Corporation. In this intervened qui tam suit, which settled for $9.25 million, the company allegedly inflated the cost of replacement pacemakers and defibrillators to federal health care programs by knowingly failing to grant warranty credits and rebates to hospitals for devices that were explanted while covered under a product warranty.

According to the government, Guidant’s misactions were evidenced in inflated invoices that failed to include appropriate credits and rebates for replacement pacemakers and defibrillators. These invoices were submitted to Department of Veterans Affairs hospitals and Department of Defense facilities. In addition, inflated invoices were allegedly submitted to private hospitals, which caused these facilities to overstate the cost of these devices on Medicare cost reports.

At its core, this is just another variation of a century-old False Claims Act theme of overcharging the federal government. However, because these misdeeds are easily obscured behind corporate walls, the qui tam litigation process offers substantial rewards to employees who successfully tear down these walls and expose companies who knowingly turn a blind eye to product warranties.

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

A number of device makers have received FDA clearance to market their biliary stents as palliative and short-term fixes to relieve pain caused by bile blockages experienced by a limited number of late-state cancer patients. Because these devices were positioned to the FDA as short-term and not life-sustaining, they were subjected to less rigorous clinical studies.

However, once the devices received the FDA’s seal of approval, several device makers allegedly started promoting the devices as suitable vascular stents, which are implanted for permanent use and undergo far longer-term and variable stresses than biliary stents due to their location in the body.

The industry-wide pervasiveness of these promotions was chronicled in a recent court decision out of the District of Massachusetts. In this case, United States ex rel. Nowak v. Medtronic, Inc., the judge observed that the off-label promotions of bilary stents are so rampant in the industry that the vast majority of bilary stent sales are for off-label uses.

Here, the court distinguished off-label pharmaceutical promotions from off-label medical device promotions. Notably, the court concluded, “Off-label promotion cases involving medical devices are uniquely complicated by the relatively more permissive and undefined nature of Medicare and Medicaid coverage of ‘off-label’ medical devices.” For support, the court reaches for a quote from a recent Texas district court decision: “While Medicare and Medicaid typically do not reimburse off-label prescriptions for drugs, . . . eligibility for reimbursement [of Category B medical devices] depends on whether the procedure performed is ‘medically necessary’ or ‘reasonable and necessary.’” United States ex rel. Bennett v. Medtronic, Inc., 747 F. Supp. 2d 745, 747 (S.D. Tex. 2010).

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

The FDA has pledged ongoing support for the program that will take aim at young professionals entering the healthcare industry and continuing to educate groups at hospitals and trade shows.

Of the reports submitted most were turned in by doctors, sending a message to the pharma sales force, “Docs are now the eyes and ears of the FDA.”

Unfortunately, in the past, the FDA has been very slow to take action on reports of wayward marketing promotions. Indeed, all too often, providers’ concerns have been simply lost in the morass of government bureaucracy.

The good news is that the False Claims Act provides a viable alternative. This fraud-fighting law not only provides substantial rewards for whistleblowers, but it includes an action-enforcing mechanism that statutorily requires the government to investigate allegations of fraud. In other words, if providers want to ensure that the government will at least consider their concerns, they should file a False Claims Act qui tam action.

If a provider is aware of egregious off-label promotions, they are strongly encouraged to seek out an experienced law firm that focuses its practice on health care False Claims Act actions.

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

The most recent example involves a case filed under the California False Claims Act, which maintains that seven private medical labs allegedly overbilled the state Medicaid program for diagnostic testing. The whistleblower, the CEO of a competitor lab company, refused to join in the alleged price-gouging.  His courage was recently rewarded, after Quest Diagnostics agreed to pay Medicaid $241 million to settle the lawsuit.

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

The Court’s reading of “report” is largely disconnected from reality. When the federal government receives a FOIA request, it responds by handing over a copy of the requested document. End of story. A government official does not pen an extensive report, detailing official government policy on the content of the requested document. Indeed, in the vast majority of cases, the “report” consists of a boilerplate cover form, memorializing the disclosure of the copied document. Nearly half of the circuits and three of the Justices recognize this reality.

So what does this mean for would-be-whistleblowers? Not much. First, it is important to note that Congress amended the public disclosure bar in 2010, clarifying that the public disclosure bar only silences whistleblowers who simply parrot publicly disclosed fraud allegations. Second, even under the old public disclosure bar, a whistleblower can move forward with a qui tam suit as long as his knowledge of the fraud is not dependent on the publicly disclosed allegations.

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

Recently, Congress sought to put the Act back on track, when it amended the public disclosure bar provision. Unfortunately, when Congress righted the proverbial ship, it failed to include a retroactivity provision. The end result is that a generation of False Claims Act cases will have to wrestle with the old public disclosure bar provision and its wayward case law.

Hopefully, courts will look to the revised public disclosure bar as a guiding light for how to apply the old provision. Indeed, this appears to be the trend in recent court decisions. At the very least, courts have gone to greater lengths to preclude only truly parasitic qui tam suits, as opposed to those that mirror snippets of publicly disclosed information. For example, this week, in U.S. ex rel. Repko v. Guthrie Clinic, P.C., No. 3:04cv1556 (M.D. Pa. April 18, 2011), the court refused to preclude evidence that showed that the relator had not based his action on publicly disclosed allegations. Previously, the court would have compared the qui tam complaint with the publicly disclosed allegations, with little concern over whether the action was actually “based upon” the public disclosure. This is a giant step forward for the qui tam community and the public fisc..

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

With each passing day, the massive scope of Stimulus Package fraud is becoming more apparent. Similarly, the inadequacy of government controls and, in turn, the need for whistleblowers is also becoming quite clear.

One example of the problem is evidenced in a recent US Department of Health and Human Services audit, where the Inspector General examined one State’s ability to monitor Stimulus funds dispensed under the federal Community Services Block Grant (CSBG) program. Here, the Inspector General examined the mechanisms used by the State of Colorado to monitor the nearly $9 million in Stimulus funds that it dished out to 40 entities that were supposedly creating, coordinating, and delivering programs and services to low-income Americans.

Pursuant to the federal CSBG Act, the State was required to monitor eligible entities by conducting full onsite reviews of each eligible entity at least once during each 3-year period. The State was also required to conduct reviews to determine whether eligible entities met the performance goals, administrative standards, financial requirements, and other requirements of its State.

The Inspector General discovered that the State largely sidestepped its responsibilities to monitor these federal dollars. Specifically, the State did not conduct full onsite reviews at all eligible entities within a 3-year period; ensure that CSBG funds were used to provide services only to eligible clients; conduct initial Stimulus Package onsite reviews at each eligible entity that received funding; or adequately document onsite reviews.

When the Inspector General dove deeper into the expenditures, it discovered rampant fraud and false claims. For example, for the quarter ending March 31, 2010, five entities billed for 140.3 full-time employee hours (FTE). However, based on the time records supporting the entities’ quarterly expenditures, the Inspector General determined that the five entities should have reported only 16.4 FTE. Thus, these entities overestimated the number of jobs reported by 123.9 FTE. Due to its inadequate internal controls, the State did not identify these errors.

Unfortunately, this is just the tip of the fraud iceberg when it comes to the federal Stimulus Package. However, the federal government does not have the time, money, or resources to audit every single dollar, as they did in this instance. In short, the federal government needs the help of the private citizenry to expose the fraudulent activity that is hidden beneath the surface. Hopefully, people with inside knowledge will step forward and leverage the federal False Claims Act to recover these federal funds.

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

This issue reared its ugly head in a 12-year-old intervened qui tam action against Caremark, a pharmacy benefits management (PBM) company that administers pharmacy benefits for insurance companies, managed care organizations, and public and private health plans and organizations. United States ex rel. Ramadoss v. Caremark Inc., No. 09-50727 (5th Cir. February 24, 2011).

Medicaid is supposed to be the payor of last resort. However, Caremark allegedly shifted the costs to Medicaid by refusing to pay for the pharmacy benefits of individuals who were eligible for both Medicaid and a plan administered by a Caremark. Specifically, when these so-called “dual eligibles” identified themselves at a pharmacy as Medicaid recipients, instead of privately-insured individuals, Caremark would subsequently refuse to reimburse Medicaid, leaving the Medicaid program with the tab.

Significantly, if the state Medicaid agency discovers that a Medicaid recipient is a dual-eligible individual, the federal law requires the agency to seek reimbursement from the private insurer, such as Caremark.

The lower court held that the Reverse FCA did not apply, for Caremark submitted false statements to state Medicaid agencies, not the federal government, and it had no “obligation” to the federal government.

On appeal, federal and State governments argued that Caremark’s actions violated the Reverse FCA, for its false statements caused the state Medicaid agencies to make false statements to the federal government, which, in turn, impaired the agencies’ obligations to the federal government.

Claims under the Reverse FCA provision require proof that the defendant “knowingly makes, uses, or causes to be made or used, a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to the Government.” 31 U.S.C. § 3729(a)(7).

In endorsing the governments’ reading of the Act, the Court of Appeals highlighted that FCA provides that a person who causes a false statement to be made “to conceal, avoid, or decrease an obligation to pay or transmit money or property to the Government” is liable under the FCA. 31 U.S.C. § 3729(a)(7). Notably, the statute does not require that the statement impair the defendant’s obligation; instead, it merely requires that the statement impair “an obligation to pay or transmit money or property to the Government.” 31 U.S.C. § 3729(a)(7) (emphasis added).

Here, FCA liability hinged on the fact that Caremark’s actions impaired the State Medicaid Agencies’ obligations to recover and return Medicaid funds.

Notably, the court was able to sidestep the trickier question of whether the Reverse FCA applies when the defendant has no direct obligations to the federal government and the innocent party has no obligation to recover the funds for the federal government. This dormant issue continues to percolate below the surface.

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

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.

The FCA public disclosure bar, 31 U.S.C. 3730(e)(4), was grafted into the False Claims Act in 1986 to silence parasitic qui tam suits. However, because the government needs the assistance of relators to uncover fraudulent behavior, Congress narrowly tailored the bar to only preclude those actions that actually copied fraud allegations from specific types of public disclosures. In short, Congress wanted to ensure that non-parasitic qui tam suits could survive, particularly if they provided additional information that assisted the government’s fraud-fighting efforts.

However, over the course of nearly a quarter of century, courts increasingly misapplied and misinterpreted the FCA public disclosure bar, such that non-parasitic qui tam suits were regularly derailed by the public disclosure bar. In one clear example, involving a healthcare fraud case, the Seventh Circuit seemed to rule in United States ex rel. Gear v. Emergency Medical Associates, 436 F.3d 726 (7th Cir. 2006), that the public disclosure bar applied when public allegations raised industry-wide fraud allegations, even when the allegations did not mention the specific defendant identified in a later filed qui tam action.

Congress recently responded, in part, by amending the FCA public disclosure bar, clarifying that the bar is only triggered when the publicly disclosed allegations are “substantially the same” as those allegations detailed in the qui tam action. In turn, Congress stressed that the public disclosure bar does not apply when the public allegations generally allege fraud against an entire industry.

In Baltazar, the Seventh Circuit was faced with making sense of this new language. As an initial matter, while the court stated that the new language did not apply to the case at bar, the Congress intent behind the amendment certainly colored its interpretation of the old public disclosure bar. Through this lens, the court held that a qui tam suit alleging “defendant-specific facts” is not “substantially similar” to publicly disclosed allegations of “industry-wide” fraud. Thus, while not explicitly rejecting its earlier Gear ruling, the Seventh Circuit clearly stated that a “defendant-specific” complaint clears the public disclosure bar.

With the “substantially similar” language now codified into the FCA public disclosure bar, the Baltazar reading of “substantially similar” clarifies that industry-wide public disclosure allegations do not derail allegations that detail fraud of a specific industry player. This is a giant step forward for the public disclosure bar and the qui tam community.

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

Strawn comes to TAF after spending fourteen years as a Department of Justice Trial Attorney and Special Assistant U.S. Attorney within the Civil Division, advising client agencies and leading teams in complex investigations and litigation. She has extensive experience in civil and criminal litigation in trial and appellate courts, has defended congressional and federal agency actions, prosecuted complex government fraud cases (including pharmaceutical cases), and handled civil penalty and injunctive actions.

“The period ahead is very promising,” said Neil Getnick, Chairman of the TAF Board of Directors. “Thanks to the excellent work of Jeb White and the TAF staff, we have a stronger federal False Claims Act and more state False Claims Acts than ever before.”

During Mr. White’s tenure with TAF, he led the effort to modernize the federal False Claims Act for the first time in nearly a quarter of a century; tirelessly advocated for greater incentives and protections for those blowing the whistle on fraud targeting the Internal Revenue Service, the Securities and Exchange Commission, and state governments; and fought to protect anti-fraud and whistleblower laws in the courts.

“Susan Strawn will be a tremendous asset for TAF and the qui tam legal community,” said Jeb White. “Our fraud-fighting efforts will be buoyed by a strong leader at the helm of TAF.”

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

According to a False Claims Act qui tam action filed by Dr. Feldman, the City of New York overruled his PCS determinations on a regulator basis, thus improperly authorizing PCS for thousands of New York Medicaid beneficiaries. Moreover, Dr. Feldman alleged that, in other instances, the City ignored his PCS determinations for additional services, thus withholding much-needed medical services from patients, potentially endangering their health and welfare.

The U.S. Government has intervened in this action, filing its complaint-in-intervention last week in the Southern District of New York. Specifically, the Government alleges that New York City’s misactions have wrongfully drained the Medicaid program of at least tens of millions of dollars.

In a variety of government health care programs, local medical directors are entrusted with the final say on whether a patient qualifies and at what level of care. Local medical directors, arguably, have the patients’ best interest in mind when making these determinations, and they are not tempted to steal public health care dollars for the benefit of their employers. However, where the local medical director’s determinations are influenced, overruled or ignored by their employers, the patients and government health care programs suffer.

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

Recently, the Justice Department lived up to its promise, when it inked a settlement with medical device manufacturer Synthes Inc. and its subsidiary Norian Corp. The agreement required these two companies to pay fines totaling $23.2 million and to plead guilty to charges that they illegally experimented with a spinal bone cement on patients. Specifically, the defendants had allegedly trained surgeons to use the cement “off-label” so the company could gather data to support its expanded use. This illegal activity caught the eye of the government after three patients died on the operating table.

Norian pled guilty to conspiracy to impede federal safety standards, a felony, and 110 related misdemeanors. Synthes avoided a felony conviction by agreeing to sell Norian and by pleading guilty to a misdemeanor of shipping a mislabeled product in interstate commerce. In addition, four former Synthes executives pled guilty or no contest to related misdemeanors.

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