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Health Care

Eon Labs Pays U.S. $3.5 Million to Settle Medicaid False Claims Allegations in qui tam case brought by Nolan and Auerbach, P.A. Client

by Nolan and Auerbach on February 22, 2010

Eon Labs Inc. has agreed to pay the United States $3.5 million to resolve False Claims Act allegations relating to the company’s drug Nitroglycerin Sustained Release (SR) capsules, the United States Department of Justice (DOJ) announced Feb. 22, 2010. Eon Labs is a subsidiary of Sandoz Inc., which is in turn a subsidiary of Novartis AG.

In April 1999, the Food & Drug Administration (FDA) determined that the unapproved drug Nitroglycerin SR lacked substantial evidence of effectiveness and published a notice proposing to withdraw approval of the product.  The qui tam lawsuit alleged that, after the FDA notice, Nitroglycerin SR no longer was legally eligible for reimbursement by government health care programs such as Medicaid.

The lawsuit alleged that  Eon submitted false quarterly reports to the government that misrepresented Nitroglycerin SR’s regulatory status as a Covered Outpatient Drug under the Medicaid program.

The settlement resolves allegations against Eon in a multi-defendant whistleblower action, which remains sealed in part.

For the full release, go to: http://www.justice.gov/opa/pr/2010/February/10-civ-171.html.

For more information about qui tam law and health care fraud, contact Nolan and Auerbach, PA. at http://www.whistleblowerfirm.com.

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Iowa Hospital to Pay U.S. $4.5 Million to Resolve False Claims Act Allegations

by Nolan and Auerbach on August 31, 2009

Covenant Medical Center in Waterloo, Iowa has agreed to pay the United States $4.5 million to resolve allegations that it violated the False Claims Act, the Department of Justice announced today.

This settlement resolves allegations that Covenant submitted false claims to Medicare by having financial relationships with five physicians that violated the Stark Law. The United States alleged that Covenant violated the Stark Law by paying commercially unreasonable compensation, far above fair market value, to five employed physicians who referred their patients to Covenant for treatment. These physicians were among the highest paid hospital-employed physicians not just in Iowa, but in the entire United States, according to the DOJ.

For the full press release, go to: http://www.usdoj.gov/opa/pr/2009/August/09-civ-849.html.

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

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President Announces Support for Important False Claims Act Amendments

by Nolan and Auerbach on April 22, 2009

The Obama Administration strongly supports enactment of S. 386 (the Fraud Enforcement and Recovery Act of 2009), according to a statement released April 20, 2009, by the Executive Office of the President. The White House’s recent endorsement of this legislation which, among other things, restores the original power of the False Claims Act, comes with broad support from law enforcement and the Department of Justice, according to an April 22 press release by Senator Patrick Leahy (D-Vt.), who introduced the Fraud Enforcement and Recovery Act (with Senators Chuck Grassley (R-Iowa) and Ted Kaufman (D-Del.) on February 5.

To read the press release and the senator’s statement, go to http://leahy.senate.gov/press/200904/042209a.html.

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

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The Time is Now for Fraud Enforcement and Recovery Act, Grassley says

by Nolan and Auerbach on April 21, 2009

As he debates on the senate floor on a bill that he cosponsored, the Fraud Enforcement and Recovery Act, Senator Chuck Grassley of Iowa released a statement reminding Americans that these fragile economic times are ideal for passing a bill aimed at empowering whistleblowers to help recover and stop health care and other types of fraud. The legislation, addressing among other things weaknesses in the False Claims Act (FCA), is necessary to encourage individuals in qui-tam type lawsuits to pursue cases that the Justice Department might or might not pursue.

Grassley says in his April 20, 2009, statement that special interests are surfacing, who don’t want to encourage whistleblowers to report wrongdoing and are looking to squelch the bill.

The point: We can’t keep spending, as a nation, without taking steps to combat fraud and abuse. The Fraud Enforcement and Recovery Act not only ensures that law enforcement officials and prosecutors have the tools and resources necessary to enforce our laws, but it also amends the civil False Claims Act to ensure that taxpayer money lost to fraud, waste or abuse can be recovered.

The legislation, most importantly, will ensure that the law adheres to the FCA’s original intent.

“Specifically, these amendments address a loophole that was created in the FCA by the Supreme Court decision in Allison Engine which could be used by fraudfeasors to evade liability by hiring subcontractors to perform work on government contracts.  Some defendants are already filing briefs in court seeking to have FCA cases dismissed based upon this decision, and it needs to be addressed to protect taxpayer dollars,” Grassley writes.

“We need to act now to stomp out new claims of fraud to send a message that the American taxpayers won’t be taken for a ride.”

To read the entire statement, go to: http://grassley.senate.gov/news/Article.cfm?customel_dataPageID_1502=20209.

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

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