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Hospitals Allegedly Enforcing Questionable Practices to Increase Bottom Line

1 Indest-2008-1By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

Doctors and hospitals around the country seem to be butting heads. In the past month, an article in The New York Times and a segment on the television “magazine” show 60 Minutes shed light on some questionable practices being enforced by hospitals on physicians working for them.

I previously wrote a blog on this structural shift in the practice of medicine. Click here to read that blog.

The effects of this trend are examined in these two news stories. Doctors and former employees from a number of hospitals around the country were interviewed and all seem to be dealing with the same issues. The biggest concerns addressed were: pressure to order unnecessary tests, admitting patients to fill hospital quotas and drive hospital profits, and the feeling of being controlled by hospital executives and administrators instead of practicing effective medicine.

Doctors Allegedly Pressured to Fill Emergency Room Beds to Increase Profits.

On December 2, 2012, 60 Minutes aired an investigative segment on one of the largest for-profit hospital chains in the country. Former employees and physicians alleged this hospital system thrived by buying urban-area hospitals and turning them into profit centers by filing empty beds from emergency rooms. A former emergency medicine doctor stated that the hospital in which he worked required an admission rate of twenty percent (20%) for patients seen in the ER and fifty percent (50%) for patients who were 65 years old and older (most of whom are Medicare patients) seen in the ER.

A former hospital system employee interviewed by 60 Minutes claimed he was in charge of auditing the hospital chain in question. He stated that he was convinced that doctors were under an extraordinary amount of pressure to fill hospital beds. He stated that he personally audited hospitals in Texas, Florida and Oklahoma, and concluded there were hundreds of thousands of dollars submitted to Medicare and Medicaid for hospital stays that did not meet standards for reimbursement, including medical necessity.

Doctors interviewed for The New York Times article had similar stories. They stated in interviews that hospital administrators created quotas for how many patients should be admitted, because more admissions allegedly meant more money. Doctors who met or exceeded quotas were rewarded with increased compensation, while doctors who did not felt in danger of losing their jobs.

Click here to read the entire New York times article.

Consequences of Ordering Unnecessary Tests.

The New York Times article looked at a number of lawsuits filed by former employees who allege the hospitals they worked for compensated doctors for ordering more tests than necessary.

The Department of Justice (DOJ) recently settled with a hospital group in Joplin, Missouri. According to the DOJ press release, the hospital system had to pay more than $9.3 million for rewarding doctors partly based on how many tests they ordered. This is in direct violation of the Stark Law and the False Claims Act.

Click here to read the entire press release from the DOJ.

I recently wrote an article for Medical Economics on the legal ramifications of ordering unnecessary tests. To read that article, click here.

If you want to know more on the Stark Law, click here.

Doctors Feel Controlled By Hospital Executives.

Doctors also stated they felt controlled by hospital executives. This was due, in part, to a corporate wide computer software system that was customized to automatically order an extensive battery of tests, some unnecessary, as soon as a patient walked into the hospital. It’s also stated that the software would prompt a physician to reconsider when he or she decided to send an emergency room patient home.

Most doctors interviewed were upset that the program also generated reports that evaluated each doctor’s performance and productivity.

To watch the segment from 60 Minutes, click here.

Hospitals Say They are Embracing the New Model of Health Care.

The hospital system in question by 60 Minutes maintains that these allegations are not correct. The executive vice president said that as a whole admission rates haven’t changed in four years and are near or below industry averages. The hospital systems believe that by consolidating they are embracing the new model of health care and state patient care comes first.

Contact Health Law Attorneys Experienced in Representing Health Care Professionals and Providers.

At the Health Law Firm we provide legal services for all health care providers and professionals. This includes physicians, nurses, dentists, psychologists, psychiatrists, mental health counselors, Durable Medical Equipment suppliers, medical students and interns, hospitals, ambulatory surgical centers, pain management clinics, nursing homes, and any other health care provider. We represent facilities, individuals, groups and institutions in contracts, sales, mergers and acquisitions.

The services we provide include reviewing and negotiating contracts, business transactions, professional license defense, representation in investigations, credential defense, representation in peer review and clinical privileges hearings, Medicare and Medicaid audits, commercial litigation, and administrative hearings.

To contact The Health Law Firm, please call (407) 331-6620 or (850) 439-1001 and visit our website at www.TheHealthLawFirm.com.

Comments?

Do you think there are constant battles between doctors and hospitals? As a health professional, have you experienced the pressure to admit patients, order unnecessary tests or refer a patient inside your network? Please leave any thoughtful comments below.

Sources:

Creswell, Julie and Abelson, Reed. “A Hospital War Reflects a Bind of Doctors in the U.S.” The New York Times. (November 30, 2012). From: http://www.nytimes.com/2012/12/01/business/a-hospital-war-reflects-a-tightening-bind-for-doctors-nationwide.html?pagewanted=all

Kroft, Steve. “Hospitals: The Cost of Admission.” 60 Minutes. (December 2, 2012). From: http://www.cbsnews.com/video/watch/?id=50136261n

Department of Justice. “Missouri Hospital System Agrees to Pay $9.3 Million to Resolve False Claims Act and Stark Law Violations.” DOJ. (November 5, 2012). From: http://www.justice.gov/printf/PrintOut3.jsp

About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law.  He is the President and Managing Partner of The Health Law Firm, which has a national practice.  Its main office is in the Orlando, Florida, area.  www.TheHealthLawFirm.com  The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone:  (407) 331-6620.

“The Health Law Firm” is a registered fictitious business name of George F. Indest III, P.A. – The Health Law Firm, a Florida professional service corporation, since 1999.

Copyright © 1996-2012 The Health Law Firm. All rights reserved.

Specialty Pharmacy Agrees to Pay A $11.4 Million Settlement in Whistleblower Case

Lance Leider headshotBy Lance O. Leider, J.D., and George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

The Department of Justice (DOJ) announced on December 27, 2012, that a specialty pharmacy, based in San Diego, California, has agreed to pay a $11.4 million settlement. That payment is to resolve allegations that the company used kickbacks to persuade doctors to write prescription for its products. The allegations came from a whistleblower lawsuit filed by a former employee.

Click here to read the press release from the DOJ.

Specialty Pharmacy Allegedly Used Expensive Kickbacks to Bribe Doctors.

An article in Modern Healthcare states that the specialty pharmacy allegedly used tickets to sporting events, concerts, plays, spa outings, golf games and ski trips to bribe doctors to write prescriptions for its products. The company also had representatives schedule paid “preceptorships,” where the reps would follow doctors in their offices in an attempt to increase prescriptions written for their products.

To read the Modern Healthcare article, click here.

Specialty Pharmacy Will Pay More Than $11 Million.

The specialty pharmacy company agreed to a forfeiture of $1.4 million to resolve the anti-kickback statue allegations. It will also pay $9.9 million to resolve false claims allegations, according to the DOJ. Representatives with the DOJ said that by entering the deferred prosecution agreement the company was able to avoid criminal and civil liability for the kickback and false claims violations.

Whistleblower Gets $1.7 Million Reward.

According to the DOJ, the settlement resolves a False Claims Act lawsuit that was filed by a former sales representative for the specialty pharmacy. As part of the resolution, that whistleblower will receive $1.7 million.

Whistleblowers stand to gain substantial amounts, sometimes as much as thirty percent (30%), of the amount the government recovers under the False Claims Act (31 U.S.C. Sect. 3730). Such awards encourage employees and contractors to come forward and report fraud. You can learn more on the False Claims Act on the DOJ website.

Contact Health Law Attorneys Experienced with Qui Tam or Whistleblower Cases.

Attorneys with The Health Law Firm also represent health care professionals and health facilities in qui tam or whistleblower cases. We have developed relationships with recognized experts in health care accounting, health care financing, utilization review, medical review, filling, coding, and other services that assist us in such matters.

To contact The Health Law Firm, please call (407) 331-6620 or (850) 439-1001 and visit our website at www.TheHealthLawFirm.com.

Comments?

What do you think of the settlement agreement? As a health professional are you tempted with kickbacks? Please leave any thoughtful comments below.

Sources:

Department of Justice. “Victory Pharma Inc. of San Diego Pays $11.4 Million to Resolve Kickback Allegations in Connection with Promotion of Its Drugs.” Department of Justice. (December 27, 2012). From: http://www.justice.gov/opa/pr/2012/December/12-civ-1547.html

Kutscher, Beth. “$11.4 Million Settlement in Pharma Kickback Case.” Modern Healthcare. (December 27, 2012). From: http://www.modernhealthcare.com/article/20121227/NEWS/312279957/

About the Authors: Lance O. Leider is an attorney with The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area. www.TheHealthLawFirm.com  The Health Law Firm, 1101 Douglas Avenue, Altamonte Springs, Florida 32714, Phone:  (407) 331-6620.

George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law. He is the President and Managing Partner of The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area. www.TheHealthLawFirm.com The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone: (407) 331-6620.

 

“The Health Law Firm” is a registered fictitious business name of George F. Indest III, P.A. – The Health Law Firm, a Florida professional service corporation, since 1999.

Copyright © 1996-2012 The Health Law Firm. All rights reserved.

Ohio Hospital Settles Whistleblower Case to Resolve False Claims Act Allegations

Lance Leider headshotBy Lance O. Leider, J.D., Attorney, The Health Law Firm

A group of doctors accused of performing an unusually high number of heart procedures on patients at an Ohio hospital has settled a whistleblower lawsuit, according to the Department of Justice (DOJ). The settlement agreement covers accusations that the doctors and the hospital billed Medicare for unnecessary cardiac procedures from 2001 to 2006.

Click here to read the press release from the DOJ.

The Ohio hospital agreed to pay the U.S. government $3.9 million, and the physician group agreed to pay $541,870 to settle the accusations.

Former Hospital Manager Speaks Up.

In October of 2006, the hospital’s former manager of the catheterization lab filed a whistleblower complaint. In the lawsuit the former employee said doctors at the Ohio hospital would allegedly encourage nurses and other staff to falsify complaints of chest pain to justify angioplasties.

In the same year, The New York Times found that in Elyria, Ohio, which is where the hospital in question is located, Medicare patients received angioplasties at a rate that was nearly four times the national average. This story prompted insurers to question the doctors’ treatment methods. To read the entire article from the New York Times, click here.

Hospital Addresses Settlement in Blog Post.

The Ohio hospital paying the settlement posted a statement on its website stating the doctors who performed these procedures felt confident they were making the right decisions for their patients. It’s explained that the settlement is not an admission of wrongdoing, but a platform to move forward. You can read the entire statement from the hospital by clicking here.

Unnecessary Cardiac Procedures are Under the Microscope.

This settlement is just one example of the government going after cardiologists and hospitals for performing unnecessary and expensive procedures. In August 2012, we wrote a blog about the investigation into the cardiology services performed at Florida HCA hospitals. Click here to read that blog.

The Health Law Firm’s President and Managing Partner, George F. Indest III, wrote an article on the legal ramifications for performing unnecessary tests and procedures. You can read that article by clicking here.

Contact Health Law Attorneys Experienced with Qui Tam or Whistleblower Cases.

Attorneys with The Health Law Firm also represent health care professionals and health facilities in qui tam or whistleblower cases. We have developed relationships with recognized experts in health care accounting, health care financing, utilization review, medical review, filling, coding, and other services that assist us in such matters.

To contact The Health Law Firm, please call (407) 331-6620 or (850) 439-1001 and visit our website at www.TheHealthLawFirm.com.

Comments?

What do you think about this settlement? Are cardiologists and hospitals being unfairly targeted? Please leave any thoughtful comments below.

Sources:

Abelson, Reed. “U.S. Settles Accusations That Doctors Overtreated.” New York Times. (January 4, 2013). From: http://www.nytimes.com/2013/01/05/business/us-settles-accusations-that-doctors-overtreated.html?_r=0

Department of Justice. “EMH Regional Medical Center and North Ohio Heart Center to pay $4.4 million to resolve False Claims Act Allegations.” Department of Justice. (January 4, 2013). From: http://www.justice.gov/usao/ohn/news/2013/04janemh.html

North Ohio Heart. “North Ohio Heart Reaches Settlement; Continues to Provide High-Quality Cardiac Care.” Ohio Medical Group. (January 4, 2013). From: http://blog.partnersforyourhealth.com/Blog/bid/93734/North-Ohio-Heart-Reaches-Settlement-Continues-to-Provide-High-Quality-Cardiac-Care
About the Author: Lance O. Leider is an attorney with The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area. www.TheHealthLawFirm.com  The Health Law Firm, 1101 Douglas Avenue, Altamonte Springs, Florida 32714, Phone:  (407) 331-6620.

“The Health Law Firm” is a registered fictitious business name of George F. Indest III, P.A. – The Health Law Firm, a Florida professional service corporation, since 1999.

Copyright © 1996-2012 The Health Law Firm. All rights reserved.

Medicare Put the Hospice Industry Under the Microscope

Patricia's Photos 013By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

It’s no surprise to anyone that Medicare is cracking down on hospices around the country. According to a report by the Office of Inspector General (OIG), eighty-two percent (82%) of hospices’ claims did not meet Medicare coverage requirements. That is why Medicare is investigating the industry as a whole. Specific details on what Medicare is looking for can be found in the 2013 OIG Work Plan. Click here to read the 2013 OIG Work Plan.

So far, Medicare has kept true to its word. During the week of January 7, 2013, the federal government announced it is suing a Central Florida hospice for Medicare fraud, according to the Orlando Sentinel. (Click here to read the Orlando Sentinel article.) Also, one of the nation’s largest and most respected hospices located in San Diego, California, is in the middle of a federal audit, according to a Kaiser Health News article. (Click here to read the Kaiser Health News article.) These are just a few examples of what hospices around the country are dealing with.

Central Florida Hospice Dealing with Qui Tam or Whistleblower Case.

The federal qui tam (whistleblower) lawsuit against the Central Florida hospice was reportedly filed by the hospice’s former vice president of finance in September 2011. The Department of Justice (DOJ) joined the whistleblower lawsuit in September of 2012.

The federal lawsuit alleges the hospice CEO ordered employees to admit patients without properly determining whether they were terminally ill, as required by Medicare. Staff was also apparently told to find ways to “edit” patients’ medical files so that the billing appeared legitimate. To learn more on this case, click here to read a blog I wrote on the hospice when the government joined the lawsuit. Click here to read the entire whistleblower complaint.

San Diego Hospice Cuts More Than Just Patients After Medicare Audit.

In 2010, federal officials audited a large hospice located in San Diego, California. Medicare is still investigating the hospice’s 2009-2010 admissions. Since the audit, the hospice has had to drop around 400 patients, due to their ineligibility for hospice care. Cutting patients meant a decrease in profits, which subsequently meant the hospice had to let 260 employees go and close a 24-bed hospital, according to Kaiser Health News.

Hospices Under Scrutiny.

According to the Kaiser Health News article, the hospice industry is booming. In 2011, it’s estimated hospices served 1.65 million people in the U.S., which is about forty-five percent (45%) of all those who died that year. Medicare paid for the hospice benefits of eighty-four percent (84%) of those patients.

Medicare is concerned with the amount of people hospices admit. Hospices normally treat patients with fewer than six months to live. If a patient recovers, Medicare expects the patient to leave the program. Patients may stay in hospice care only if they are re-certified as still likely to die within six months by a physician. It’s thought that enrollment bonuses to employees and kickbacks to nursing homes that refer patients are big factors as to why hospices accept ineligible patients.

Medicare Trying to Keep Up with Fraud and Abuse in Hospice Industry.

Currently, the Centers for Medicare and Medicaid Services (CMS) is focused on safeguarding tax payers dollars from fraud. I have recently seen a number of audits initiated against health professionals who treat assisted living facility (ALF), hospice and skilled nursing facility (SNF) residents. Most often these are audits by the Medicare Administrative Contractor (MAC), because these facilities have been identified as fraught with fraud and abuse. I wrote a two-part blog this topic. Click here for part one and here for part two.

If you are being audited, click here to read some tips we recommend in responding to a Medicare audit.

Contact Health Law Attorneys Experienced in Handling Medicaid and Medicare Audits.

The Health Law Firm’s attorneys routinely represent physicians, medical groups, clinics, pharmacies, nurses, durable medical equipment (DME) suppliers, home health agencies, nursing homes and other healthcare providers in Medicaid and Medicare investigations, audits and recovery actions.

To contact The Health Law Firm please call (407) 331-6620 or (850) 439-1001 and visit our website at www.TheHealthLawFirm.com.

What Do You Think?

What do you think about Medicare targeting hospices? Do you think it is necessary? Is the hospice business going to suffer because of these investigations? Please leave any thoughtful comment below.

Sources:

Santich, Kate. “Feds Sue Hospice of the Comforter for Medicare Fraud.” Orlando Sentinel. (January 14, 2013). From: http://www.orlandosentinel.com/news/local/breakingnews/os-feds-sue-hospice-of-the-comforter-20130114,0,7827264.story

U.S. ex rel. Stone v. Hospice of the Comforter, Inc., No. 6:11-cv-1498-ORL-22-AAB (M.D. Fla) United State District Court for the Middle District of Florida Orlando Division. (September 12, 2012), available at http://www.thehealthlawfirm.com/uploads/US%20v%20Hospice%20of%20the%20Comforter.pdf

Dotinga, Randy. “Slowly Dying Patients, Am Audit and A Hospice’s Undoing.” Kaiser Health News. (January 16, 2013). From: http://www.kaiserhealthnews.org/Stories/2013/January/16/san-diego-hospice.aspx

About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law. He is the President and Managing Partner of The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area. www.TheHealthLawFirm.com The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone: (407) 331-6620.

 

“The Health Law Firm” is a registered fictitious business name of George F. Indest III, P.A. – The Health Law Firm, a Florida professional service corporation, since 1999.

Copyright © 1996-2012 The Health Law Firm. All rights reserved.

Speech Therapist Arrested for Billing Medicaid $500,000 for Work at Florida Day Care Centers While Living in Illinois

6 Indest-2008-3By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

A speech therapist was arrested on March 29, 2013, for allegedly billing Medicaid more than $500,000 for services that she did not provide, according to the Florida Office of the Attorney General (AG). The speech therapist now faces charges of Medicaid fraud and grand larceny.

Click here to read the press release from the AG.

Billed Medicaid for Services Provided in Florida, While Living in Illinois.

According to an article in The Palm Beach Post, authorities began investigating the speech therapist when they received a tip that she was overbilling for services provided. During the investigation it was found that while the speech therapist reported to Medicaid she lived in Florida, she has been allegedly living in Illinois for the past eight years. The speech therapist allegedly employed two unlicensed speech therapists to work for her in two Florida day care centers. From January 2008 until February 2013, the speech therapist billed Medicaid for services she allegedly did not administer.

To read the entire article from The Palm Beach Post, click here.

Speech Therapist Faces Restitution and Prison Time.

The Florida AG’s Medicaid Fraud Control Unit (MFCU) and the West Palm Beach Police Department made the arrest. If convicted, the speech therapist faces up to $20,000 in fines, 60 years in prison and restitution.

MFCU and State and Federal Auditing Agencies.
The MFCU receives referrals from many other states and federal agencies. Often, matters that could be resolved as simple billing errors get escalated to criminal charges when Medicaid providers are interviewed and give evidence against themselves. Admitting to any misconduct, no matter how slight, may lead to far more serious criminal charges.

Click here for tips on how to respond to a Medicaid audit.

Faced with an Medicaid Audit? Contact Health Law Attorneys Experienced in Handling Medicaid Audits.

Medicaid fraud is a serious crime and is vigorously investigated by the state MFCU, the Agency for Healthcare Administration (AHCA), the Zone Program Integrity Contractors (ZPICs), the FBI, the Office of Inspector General (OIG) of the U.S. Department of Health and Human Services (DHHS). Often other state and federal agencies, including the U.S. Postal Service (USPS), and other law enforcement agencies participate. Don’t wait until it’s too late. If you are concerned of any possible violations and would like a confidential consultation, contact a qualified health attorney familiar with medical billing and audits today. Often Medicaid fraud criminal charges arise out of routine Medicaid audits, probe audits, or patient complaints.
The Health Law Firm’s attorneys routinely represent physicians, medical groups, clinics, pharmacies, assisted living facilities (AFLs), home health care agencies, nursing homes, group homes and other healthcare providers in Medicaid and Medicare investigations, audits and recovery actions.

To contact The Health Law Firm please call (407) 331-6620 or (850) 439-1001 and visit our website at www.TheHealthLawFirm.com.

Comments?

How did the speech therapist get away with this for so long? What are your thoughts on this story? Please leave any thoughtful comments below.

Sources:

Seltzer, Alexandra. “Authorities: Woman billed Medicaid $500,000 for working at West Palm Beach day care centers while in Illinois.” The Palm Beach Post. (March 28, 2013). From: http://www.palmbeachpost.com/news/news/crime-law/authorities-she-billed-medicaid-500k-for-working-a/nW6ht/

Meale, Jenn. “Medicaid Fraud Control Unit Arrests Speech Therapist for $500,000 of Medicaid Fraud.” Florida Office of the Attorney General. (March 29, 2013). From: http://www.myfloridalegal.com/newsrel.nsf/newsreleases/AE5D612364AD29C285257B3D004BE6B5

About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law. He is the President and Managing Partner of The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area. www.TheHealthLawFirm.com The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone: (407) 331-6620.

The Health Law Firm” is a registered fictitious business name of George F. Indest III, P.A. – The Health Law Firm, a Florida professional service corporation, since 1999.
Copyright © 1996-2012 The Health Law Firm. All rights reserved.

Two Separate Lawsuits Against Novartis Pharmaceuticals Corporation Allege Illegal Kickbacks and False Claims

IndestBy George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

Novartis Pharmaceuticals Corporation (NPC) is currently fielding two different lawsuits, filed just days apart from each other, by the U.S. Department of Justice (DOJ). The first lawsuit was filed on April 23, 2013, alleging the company gave illegal kickbacks to pharmacists. A second lawsuit was filed on April 26, 2013, alleging illegal kickbacks were paid by NPC to health care providers. According to the DOJ, the government’s complaint seeks damages and civil penalties under the False Claims Act, and under the common law for paying kickbacks to doctors to induce them to prescribe NPC products that were reimbursed by federal health care programs.

Click here to read the entire press release from the DOJ.

NPC Accused of Treating Health Care Professionals to Expensive Dinners, Product Discounts and Fishing Trips.

Both lawsuits allege NPC violated the Anti-Kickback Statute. In the April 23, 2013, complaint against NPC the lawsuit alleges the company gave kickbacks, in the form of rebates and discounts to pharmacies in exchange for the pharmacies’ cooperation in switching patients from competitors’ drugs to NPC products.

The April 26, 2013, lawsuit accuses NPC of paying doctors to speak about certain drugs at events that were allegedly social occasions. Many of the programs were allegedly held in circumstances in which it would be impossible to have a presentation. According to the DOJ, this included fishing trips off the Florida coast and meetings in Hooters restaurants. NPC is also accused of treating health care professionals to expensive dinners. The payments and dinners were apparently kickbacks to the doctors for writing prescriptions for NPC drugs.

Florida Doctors Involved.

The lawsuit alleges at least six Florida doctors of participating in the bogus conferences and taking thousands of dollars in kickbacks, according to the Tampa Bay Times. The doctors are not named or charged in the civil lawsuit.

To read the allegations listed in the lawsuit against Florida doctors, click here for the Tampa Bay Times article.

NPC Denies All Claims.

In a press release, NPC disputes all of the government’s allegations. The pharmaceutical company states that discounts and rebates by pharmaceutical companies are a customary and legal procedure, as recognized by the government. It also addresses the physician speaker programs by saying the programs are also acceptable practices designed to inform physicians about the uses of different types of medicines. Click here to read the entire press release from NPC.

The Law Against Using Bribes in Exchange for Selling a Drug or Service.

For years drug companies have paid doctors to speak about new drugs at educational conferences with other health care professionals. The practice is legal, but considered questionable.

Under the Anti-Kickback Statute, it’s a felony for health care professionals to accept bribes in exchange for recommending a drug or service covered by Medicare, Medicaid, TRICARE or the Department of Veterans Affairs health care program.

Whistleblowers Who Report Fraud and False Claims Against the Government Stand to Receive Large Rewards.

The original complaint against NPC was allegedly filed under the qui tam, or whistleblower, provisions of the False Claims Act by a former sales representative.

Individuals working in the health care industry, whether for hospitals, pharmacies, nursing homes, medical groups, home health agencies or others, often become aware of questionable activities. Often they are even asked to participate in it. In many cases the activity may amount to fraud on the government.

In a two-part blog series on whistleblower/qui tam lawsuits I explain types of false claims, the reward programs for coming forward with a false claim, who can file a whistleblower/qui tam lawsuit, and more. Click here to read the first part of this blog, and click here for the second part.

Contact Health Law Attorneys Experienced with Qui Tam or Whistleblower Cases.

Attorneys with The Health Law Firm represent plaintiffs, patients, health care professionals and health facilities in qui tam or whistleblower cases. We have developed relationships with recognized experts in health care accounting, health care financing, utilization review, medical review, filling, coding, and other services that assist us in such matters.

To contact The Health Law Firm, please call (407) 331-6620 or (850) 439-1001 and visit our website at www.TheHealthLawFirm.com.

Comments?

What do you think of these lawsuits? Please leave any thoughtful comments below.

Sources:

Masow, Julie. “Novartis Pharmaceuticals Corporation Disputes Allegations in Two US Government Lawsuits and Looks Forward to a Fair Discussion of the Facts.” Novartis Pharmaceuticals. (April 26, 2013). From: http://www.pharma.us.novartis.com/newsroom/pressreleases/137176.shtml

Davis, Brittany Alana. “Lawsuit: Pharmaceutical Company Gave Kickbacks to Florida Doctors.” Tampa Bay Times. (May 3, 2013). From: http://www.tampabay.com/news/courts/lawsuit-pharmaceutical-company-gave-kickbacks-to-florida-doctors/2119133

Department of Justice. “United States Files Complaint Against Novartis Pharmaceuticals Corp. for Allegedly Paying Kickbacks to Doctors in Exchange for Prescribing Its Drugs.” Department of Justice. (April 26, 2013). From: http://www.justice.gov/opa/pr/2013/April/13-civ-481.html

About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law. He is the President and Managing Partner of The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area. www.TheHealthLawFirm.com The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone: (407) 331-6620.

 

The Health Law Firm” is a registered fictitious business name of George F. Indest III, P.A. – The Health Law Firm, a Florida professional service corporation, since 1999.
Copyright © 1996-2012 The Health Law Firm. All rights reserved.

2010 District Ruling for $44.9 Million in Tuomey Overturned by U.S. Appeals Court

By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

Tuomey Reversed

The 4th U.S. Circuit Court of Appeals overturned a federal district judge’s 2010 decision for Tuomey Healthcare System on March 30, 2012. (U.S. ex rel. Drakeford v. Tuomey Health. Sys., Inc., 4th Cir., No. 10-1819 (Mar. 30, 2012)) The lower court’s decision ordered Toumey Healthcare System to pay $44.9 million for allegedly violating the Stark Law. (42 U.S.C. § 1395nn) The appeals court decided that the 2010 district ruling denied Tuomey its Seventh Amendment right to a jury trial. 

A physician initiated a qui tam or whistle-blower suit against Toumey under the False Claims Act in 2005. The suit was later picked up and prosecuted by the U.S. Department of Justice. In the False Claims Act complaints filed in the U.S. District Court in Columbia, S.C., the whistle-blower and the U.S. Department of Justice (DOJ) alleged that Tuomey had contracts with physicians that were illegally overpaid by Tuomey. This was alleged to be in exchange for their exclusively referring patients to Tuomey’s hospital, thus violating the Stark Law. Billings for referrals from those physicians allegedly constituted false claims as a result of this.

Novel Theory Used to Obtain Large Recovery

This was a novel theory to pursue in a qui tam or whistle-blower case because it was not based directly on submission of false claims. Instead it put forth the theory that the claims were false because they violated the anti-referral provisions of the Stark Act.

In March 2010, a jury found that Tuomey had not violated the False Claims Act but did find Tuomey guilty of committing Stark Law violations. (Note: The Stark Act does not establish a private cause of action for plaintiff to recover civil damages.) This jury verdict was set aside by the judge and a new trial regarding the False Claims Act allegations was granted. Under the lower court’s decision, Tuomey was still required to repay the government $44.9 million in Medicare payments that were allegedly received through physician contracts that violated the Stark Law.  This was the part of the verdict that was not set aside by the trial court.

However, according to the opinion of the appeals court, when the district court set aside the jury’s verdict, it specifically ordered that the new trial would encompass the whole False Claims Act matter, including whether Tuomey had violated the Stark Law. This nullified the jury’s interrogatory answer (part of the verdict it returned) regarding the Stark Law. Thus, when the district court ordered Tuomey to repay the government for violating the Stark Law, it denied Tuomey of its right to a jury trial.

Two Major Stark Issues Discussed

The appeals court also addressed two major Stark Law issues that were raised on appeal and are likely to recur on remand. The first issue is whether the facility component of the services performed by the physicians, for which Tuomey billed a facility fee to Medicare, constituted a “referral” within the meaning of the Stark Law. The court used the Health Care Financing Administration’s (now the Centers for Medicare and Medicaid Services) final rule on referrals (66 Fed. Reg. 856, 941, Jan. 4, 2001) to conclude that the facility/technical component of the physician’s personally performed services does constitute a referral.

The second issue was the correct standard to use. Having decided that the physicians were making referrals to Tuomey, the appeals court then examined if an arrangement that takes into account anticipated referrals violate the Stark Act’s “volume or value standards.” The “volume or value standards” require that compensation must be calculated in a way that does not take into account the volume or value of referrals between the parties.

Fair Market Value Standard

Additionally, Stark Act requires that whatever financial relationship exists reflects “fair market value.” Stark defines “fair market value” as compensation that “has not been determined in any manner that takes into account the volume or value of anticipated or actual referrals”(42 C.F.R. § 411.351). Thus, the court concluded that compensation based on the volume or value of anticipated referrals does implicate the volume or value standard. The court left it to the jury to decide if Tuomey’s contracts violated the fair market value standard.

$50 Million May be Returned to Tuomey

The government has 45 days from the date of the decision to request a rehearing. If it doesn’t, the matter goes back to the South Carolina federal district court where it was originally decided. Tuomey can then request the money that it had set aside to pay the government back, $50 million according to it, to be released to the health system.

Tuomey Issues Press Release

In a press release dated March 31, 2012 (Press Release), signed by Jay Cox, its President and Chief Executive Officer (CEO), Tuomey Healthcare System stated:

The 4th Circuit has issued an opinion in favor of Tuomey on our appeal. We are pleased that the 4th Circuit Court has decided that the District Court’s judgment violated Tuomey’s Seventh Amendment right to a jury trial, and vacated (reversed) the $50 million judgment against Tuomey Healthcare System.

*          *          *

As the Court of Appeals said in the opinion: “The whole case, including the issues of fact at the former trial is open for hearing and determination.” This includes the incorrect finding by the first jury that Tuomey violated the Stark Law. Again, we are pleased with this news and we will keep you posted as we learn more.

Setback to Plaintiff’s Qui Tam Bar?

The original decision in Tuomey had encouraged plaintiff’s attorneys who take whistle-blower cases in health care matters and had alarmed health care systems across the country.  Although this does not eliminate the ability to use Stark Act violations as the basis for False Claims Act recoveries, it does indicate that the courts will require strict pleading, proof and procedural rules before it does allow this.

Sources Include:

Blesch, Gregg, “Appeals Court Overturns Order for S.C. Hospital to Pay $45 Million in Stark Case,” Modern Healthcare (Apr. 1, 2012). From:
http://www.modernhealthcare.com/article/20120401/NEWS/304019973/appeals-court-overturns-order-for-s-c-hospital-to-pay-45-million-in#

Cheung, Karen M., “Federal Appeals Court Overturns $45M Stark Ruling,” FierceHealthcare (Apr. 2, 2012). From:
http://www.fiercehealthcare.com/story/federal-appeals-court-overturns-45m-stark-ruling/2012-04-02

Cox, Jay, “Federal Case Update,” Tuomey Healthcare System Press Release (Mar. 31, 2012).

Cox, Jay, “Federal Case Update,” Tuomey Healthcare System Press Release (Mar. 31, 2012). From: http://www.tuomey.com/Articles/federal_case_update.aspx

Davis, Caralyn, “Stark Violations: Tuomey Healthcare in South Carolina Ordered to Pay $50 Million,” FierceHealthcare (June 9, 2012). From: http://www.fiercehealthfinance.com/story/stark-violations-tuomey-healthcare-s-c-ordered-pay-50-million/2010-06-09

HHS, “Medicare and Medicaid Programs: Physicians’ Referrals to Health Care Entities With Which They Have Financial Relationships,” 66 Fed. Reg. 856, 941 (Jan. 4, 2001). From:  http://www.gpo.gov/fdsys/pkg/FR-2001-01-04/pdf/01-4.pdf

U.S. ex rel. Drakeford v. Tuomey Health.Sys., Inc., 4th Cir., No. 10-1819 (Mar. 30, 2012). From: http://pacer.ca4.uscourts.gov/opinion.pdf/101819.P.pdf

About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law.  He is the President and Managing Partner of The Health Law Firm, which has a national practice.  Its main office is in the Orlando, Florida, area.  www.TheHealthLawFirm.com  The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone:  (407) 331-6620.

Department of Justice Seeks up to $600 Million in Whistleblower Case Against Halifax Health in Daytona Beach, Florida

1 Indest-2008-1By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

The U.S. Department of Justice (DOJ) is asking for between $350 million and $600 million in damages and penalties from Halifax Health Medical Center in Daytona Beach, according to The Daytona Beach News-Journal. A Halifax employee filed the whistleblower lawsuit in 2009, accusing the hospital of illegal kickbacks to doctors, improper admissions and unnecessary spinal surgeries. The DOJ joined the case in 2011. Click here to read a previous blog on the DOJ joining the lawsuit.

If the government wins this case, it would amount to the largest whistleblower case of its kind in the nation.

Claims Against Halifax.

Halifax is accused of overbilling Medicare by inappropriately admitting patients and having financial arrangements with some of its doctors that violated a federal anti-kickback law.

The federal Stark Law prohibits Medicare and Medicaid payments for hospital services that are prescribed by doctors who have profit-sharing agreements with the hospital. The law was made to ensure that referrals are made for medical reasons only, without financial motives. However, according to the lawsuit, Halifax had agreements with its doctors that gave them a financial incentive to generate hospital revenues.

The whistleblower was recently interviewed in an Orlando Sentinel article. She claims neurosurgeons at Halifax allegedly received illegal kickbacks tied to their performance. The whistleblower claims a similar pattern existed with six of the hospital’s oncologists. The suit also alleges one surgeon performed spinal fusion surgeries that were not medically necessary.

To read more from the whistleblower in an Orlando Sentinel article, click here.

Halifax Denies All Claims.

Halifax denies all of the DOJ’s allegations. The hospital has filed two motions to dismiss the case. However, both have been denied. According to The Daytona Beach News-Journal, the case is set for trial in November 2013. Click here to read the entire article from The Daytona Beach News-Journal.

Whistleblowers Who Report Fraud and False Claims Against the Government Stand to Receive Large Rewards.

Since the Halifax whistleblower filed her action under a federal law, she is entitled to recoup fifteen percent (15%) to twenty-five percent (25%) of the damages. Similarly, individuals working in the health care industry, whether for hospitals, nursing homes, medical groups, home health agencies or others, often become aware of questionable activities. Often they are even asked to participate in it. In many cases the activity may amount to fraud on the government.

In a two-part blog, I explain types of false claims, the reward programs for coming forward with a false claim, who can file a whistleblower/qui tam lawsuit and what is needed to be a successful whistleblower. Click here for part one, and click here for part two.

Contact Health Law Attorneys Experienced with Medicaid and Medicare Qui Tam or Whistleblower Cases.

In addition to our other experience in Medicare, Medicaid and Tricare cases, attorneys with The Health Law Firm also represent health care professionals and health facilities in qui tam or whistleblower cases. We have developed relationships with recognized experts in health care accounting, health care financing, utilization review, medical review, filling, coding, and other services that assist us in such matters.

To learn more on our experience with Medicaid and Medicare quit tam or whistleblower cases, visit our website.

To contact The Health Law Firm, please call (407) 331-6620 or (850) 439-1001 and visit our website at www.TheHealthLawFirm.com.

Comments?

What do you think of this qui tam/whistleblower lawsuit? Please leave any thoughtful comments below.

Sources:

Swisher, Skyler. “Justice Department Seeks up to $600 Million in Lawsuit Against Halifax.” The Daytona Beach News Journal. (June 3, 2013). From: http://www.news-journalonline.com/article/20130603/NEWS/306039975/1040?p=1&tc=pg

Jameson, Marni. “Halifax Hospial Whistleblower at Forefront of $200M Alleged Fraud.” Orlando Sentinel. (April 15, 2013). From: http://articles.orlandosentinel.com/2013-04-15/news/os-halifax-hospital-whistleblower-20130415_1_marlan-wilbanks-illegal-kickbacks-halifax-health

About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law. He is the President and Managing Partner of The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area. www.TheHealthLawFirm.com The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone: (407) 331-6620.

 

 

“The Health Law Firm” is a registered fictitious business name of George F. Indest III, P.A. – The Health Law Firm, a Florida professional service corporation, since 1999.
Copyright © 1996-2012 The Health Law Firm. All rights reserved.

Walgreens Reaches Settlement in False Claims Act Case

By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

Walgreens has reached a $7.9 million settlement with the United States and participating states that resolves allegations that Walgreens violated the False Claims Act. The DOJ announced the settlement on April 20, 2012. To view the DOJ’s press release concerning the settlement with Walgreens, click here. To view the False Claims Act, click here.

Walgreens Allegedly Offered Illegal Inducements to Medicare and Medicaid Beneficiaries.

The settlement was reached after Walgreens was accused of offering illegal inducements to beneficiaries of government health programs (Medicare, Medicaid, the Federal Employees Health Benefits Program (FEHBP), and TRICARE ). Walgreens allegedly offered gift cards to government health program beneficiaries when they transferred a prescription from another pharmacy to Walgreens. The government maintains that such inducements are a violation of state and federal laws.

Walgreens Pays Back Individual State Medicaid Programs.

Since the initial settlement was announced by the DOJ, Walgreens has begun to pay back individual state Medicaid programs that were impacted by the alleged inducements. State and federal laws prohibit such inducements to buy services and goods provided under Medicaid. Walgreens is now paying the states for prescription claims it submitted for reimbursement to Medicaid that were a result of the alleged inducements. Some of the states involved include California, Indiana, Michigan, and Missouri.

Whistleblowers Initiated Government Investigation of Walgreens’ Gift Card Inducements.

The allegations were brought to the government by two whistleblowers. Two separate whistleblower lawsuits were filed under the qui tam, or whistleblower, provisions of the False Claims Act and state False Claims Act statutes. The whistleblowers will receive $1,277,172 from the United States for their role in filing the qui tam actions.

Contact Health Law Attorneys Experienced with False Act Claims Cases.

The Health Law Firm represents physicians, medical practices, pharmacists, pharmacies, and other health provider in investigations, regulatory matters, licensing issues, litigation, inspections and audits involving government health programs (Medicare, Medicaid, TRICARE). The Health Law Firm also represents health providers in False Claims Act cases.

To contact The Health Law Firm, please call (407) 331-6620 or (850) 439-1001 and visit our website at www.TheHealthLawFirm.com.

Sources Include:

Cohen, Bryan. “Whistleblower Lawsuits Against Walgreens Settled.” LegalNewsline. (June 12, 2012). From: http://www.legalnewsline.com/news/236427-whistleblower-lawsuits-against-walgreens-settled

Department of Justice, Office of Public Affairs. “Walgreens Pharmacy Chain Pays $7.9 Million to Resolve False Prescription Billing Case.” Department of Justice. (April 20, 2012). Press Release. From: http://www.justice.gov/opa/pr/2012/April/12-civ-505.html

About the Author:  George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law.  He is the President and Managing Partner of The Health Law Firm, which has a national practice.  Its main office is in the Orlando, Florida, area.  www.TheHealthLawFirm.com  The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone:  (407) 331-6620.

Fifty-Five Hospitals Around the Country to Pay the Government $34 Million Settlement for False Claims Allegations

10 Indest-2008-7By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

Fifty-five (55) hospitals in twenty-one (21) states have agreed to pay the Department of Justice (DOJ) more than $34 million to settle allegations of Medicare fraud in a whistleblower case, according to the DOJ on July 2, 2013. The false claims allegations involve a back procedure called a kyphoplasty. The kyphoplasty can be performed safely and effectively as an outpatient procedure. However, it is alleged that hospitals were using more expensive, inpatient procedures to increase Medicare billings.

To read the press release from the DOJ, click here.

A kyphoplasty is used to treat spinal fractures usually caused by osteoporosis.

Fourteen (14) Florida Hospitals to Pay $11 Million to Government.

According to an article on Health News Florida, fourteen (14) Florida hospitals have agreed to pay around $11 million to settle the DOJ’s false claims charges.

One of the Florida hospitals was Mount Sinai Medical Center in Miami, which will pay $1.84 million. A number of HCA hospitals in Florida were included in the settlement. These hospitals will pay $7.14 million collectively. Another group that settled was the hospitals in the Morton Plant Mease group, which is part of the Baycare Health System in Tampa Bay. This settlement was listed at $2.37 million.

To see all of the Florida hospitals allegedly involved, click here to read the Health News Florida article.

Whistleblower Lawsuit Filed by Two Former Employees.

According to the DOJ, all but four of the settling facilities were named as defendants in a whistleblower lawsuit brought under the False Claims Act. The lawsuits were filed by a former reimbursement manager for Kyphon and a former regional sales manager for Kyphon. The DOJ stated that Kyphon is the company that allegedly advised hospitals to do kyphoplasty procedures as inpatient instead of outpatient procedures. These two will receive a total of about $5.5 million from the settlements.

If you want to know more about whistleblower/qui tam lawsuits, click here to read the first part of a two-part blog, and click here for the second part.

Previous Settlements from Kyphoplasty Procedures.

A similar settlement was reached in 2012, when 14 hospitals agreed to pay a settlement of more than $12 million to the government for allegedly inflating their profits based on unnecessary hospital admissions, according to the Washington Post. Click here to read that article.

The DOJ stated that it has now reached settlements with more than 100 hospitals, for a total of about $75 million resolving allegations that the facilities fraudulently billed Medicare for kyphoplasty procedures.

The Health Care Fraud Prevention and Enforcement Action Team (HEAT) is on Fire.

These settlements are a part of the government’s fight against health care fraud and another win for the Health Care Fraud Prevention and Enforcement Action Team (HEAT). HEAT’s mission is to focus its efforts on preventing and deterring fraud and to enforce current anti-fraud laws around the country. It was created in 2009, by the Department of Health and Humans Services (HHS) and the DOJ. To date, the DOJ’s total recoveries in False Claims Act cases since January 2009, are more than $14.7 billion. To learn more about HEAT, click here.

Contact Health Law Attorneys Experienced with Qui Tam or Whistleblower Cases.

Attorneys with The Health Law Firm also represent health care professionals and health facilities in qui tam or whistleblower cases. We have developed relationships with recognized experts in health care accounting, health care financing, utilization review, medical review, filling, coding, and other services that assist us in such matters.

To contact The Health Law Firm, please call (407) 331-6620 or (850) 439-1001 and visit our website at www.TheHealthLawFirm.com.

Comments?

What do you think of these settlements? Please leave any thoughtful comments below.

Sources:

Department of Justice. “Fifty-Five Hospitals to Pay U.S. More Than $34 Million to Resolve False Claims Act Allegations Related to Kyphoplasty.” Department of Justice. (July 2, 2013). From: http://www.justice.gov/opa/pr/2013/July/13-civ-745.html

Associated Press. “Justice Department, 55 Hospitals Reach $34 Million Settlement Over Medicare Fraud Claims.” Washington Post. (July 2, 2013). From: http://www.washingtonpost.com/business/justice-department-55-hospitals-reach-34-million-settlement-over-medicare-fraud-claims/2013/07/02/3d3d2356-e34e-11e2-bffd-37a36ddab820_story.html

Health News Florida Staff. “14 FL Hospitals to Pay $11 Million.” Health News Florida. (July 2, 2013). From: http://health.wusf.usf.edu/post/14-fl-hospitals-pay-11-million

About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board
Certified by The Florida Bar in Health Law.  He is the President and Managing Partner of The Health Law Firm, which has a national practice.  Its main office is in the Orlando, Florida, area.  www.TheHealthLawFirm.com  The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone:  (407) 331-6620.

“The Health Law Firm” is a registered fictitious business name of George F. Indest III, P.A. – The Health Law Firm, a Florida professional service corporation, since 1999.
Copyright © 1996-2012 The Health Law Firm. All rights reserved.

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