New York Employment Lawyer Blog

Dava Pharmaceuticals ("Dava"), a global pharmaceutical company, agreed this week to pay the U.S. government $11 million to settle allegations that it violated the False Claims Act. The government had charged Dava with violating its obligations under the Medicaid Prescription Drug Rebate Program ("Rebate Program"). A whistleblower brought the alleged fraud to the governments attention.

Pharmaceutical companies must enter into the Rebate Program if they want their products to be available to Medicaid beneficiaries under the Medicaid program. Under the Rebate Program, if you are a participating drug company, you must pay quarterly rebates to the state Medicaid programs, which are based in part on whether a drug is a "generic" or "branded" product and the difference between what the health care program paid for the drug and what other purchasers paid for it.

The settlement involves alleged conduct that occurred between October 2005 and September 2009. The government alleged that Dava, in order to lower its Medicaid rebate payments, incorrectly labeled its version of the drugs, cefdinir, clarithromycin, and methotrexate as "generic" drugs instead of accurately calling them "branded" products, which in effect lowered its overall percentage rebate that it owed to Medicaid. Dava also incorrectly figured out the average manufacturer prices for its versions of these drugs and thereby further reducing its Medicaid rebate obligation. In effect, Dava did not pay the full amount due to the Medicaid program and overcharged certain public health services for these products.

Of the $11 million settlement, the federal government will receive about $5 to $7 millions while the Medicaid participating states will receive over $5 million. Dava will pay about $200,000 to certain public health services entities who overpaid for the drugs at issue.

Tony West, the Assistant Attorney General for the Civil Division of the Department of Justice, stated that "Pharmaceutical companies that participate in Medicaid must accurately report drug prices and pay their fair share of rebates to the federal and state governments." He added that "Settlements like this one help maintain important programs on which so many depend for needed health care."

The qui tam whistleblower statute is probably one the governments' most important weapons in combating fraud against the government. It allows private citizens with knowledge of fraud being committed against the government to bring an action on behalf of the government. Under these statutes, government can recover three times the amount it was defrauded as well as charge civil penalties of $5,500 to $11,000 per false claim. Depending on whether the government intervenes in the action or not, a whistleblower can receive between 15% to 30% of the government's recovery. Jim Conrad, the whistleblower in this case, will receive 15% of the government's recovery as his share for bringing Dava's fraud to the government's attentions.

Committing fraud against the government is the same as stealing from taxpayers. If the whistleblower in this case had not brought this action, Dava's fraud would probably have gone undetected, costing taxpayers million. If you know of fraud being committed against the government at your workplace, call our qui tam Whistleblower Attorneys at Villanueva & Sanchala at (800) 893-9645 to help you determine if you have an action under the False Claims Act..

Continue reading "False Claims Act: Whistleblower Gets Huge Payoff by Exposing Medicaid Fraud" »

The Justice Department just announced that the government is intervening in a whistleblower lawsuit against AseraCare Hospice ("AseraCare") for violating the False Claims Act by misspending millions of dollars which was intended for Medicare recipients with less than 6 months to live, and using it on patients who were not terminally ill. AseraCare is a for profit business with about 65 hospice providers in 19 states.

For-profit companies like AseraCare, who care for hospice patients, receive money from Medicare only for Medicare recipients who are terminally ill. In other words, when AseraCare admits a Medicare patient for hospice care, that patient is not longer able to receive medical service that would help treat or cure his or her illness. The purpose of hospice care it to provide palliative care which is intended to relieve pain, symptoms or stress of terminal illness, which includes medical, social, psychological, emotional and spiritual services.

The government has charged AseraCare with knowingly submitting false claims to Medicare for patients receiving hospice care who were not terminally ill. Joyce White Vance, the U.S. Attorney for the Northern District of Alabama, stated that "Medicare benefits, including hospice benefits, are intended only for those individuals who are appropriately qualified."

Two whistleblowers, Dawn Richardson, and Marsha Brown, who are former employees of AseraCare, originally filed this qui tam lawsuit under the False Claims Act. Since the government has intervened and taken over the lawsuit, the whistleblowers may by entitled to recover anywhere from 15% to 25% of the government's recovery. Whether you are a patient, a former or current employee, or a competitor, you can bring an action on behalf of the government if you have knowledge of fraud being committed against the government.

Under the False Claim Act, a healthcare provider will be liable if he or she knowingly files a false or fraudulent claim for payment or approval to Medicare or any other governmental healthcare program or knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by a healthcare program. If AseraCare is found to be guilty, the government may recover treble damages as well as impose monetary penalties ranging from $5,500 to $11,000 per violation.

Medicare and Medicaid fraud are serious and costly violations of federal law which can also result in exclusion from participating in Medicare and Medicaid. If you think your healthcare company or medical practice has violated the False Claims Act, you must act quickly. Once you discover that you have been overpaid, you must notify the government as to why the overpayment occurred and return the overpayment within 60 days of your discovering it. Our attorneys have helped many health care providers resolve costly mistakes and avoid potential litigation. If you think you might have received an overpyamnet from Medicare or Medicaid, call our False Claims Attorneys at Villanueva & Sanchala at (800) 893-9645 to help you remedy any fraud before the government or a whistleblower brings an action against you.

Continue reading "False Claims Act: Before Careful of Committing Fraud When You Submit Claims Under Medicare and Medicaid " »

The Department of Justice recently settled allegations with pharmaceutical giant GE Healthcare Inc. that a company that it had acquired in 2004, Amersham Health, Inc. ("Amersham"), violated the False Claims Act by overcharging Medicare for a drug used to detect heart disease. GE Healthcare paid $30 million plus interest to resolve the qui tam whistleblower lawsuit. The whistleblower, James Wagel, will get $5.1 million from the government's recovery.

The government had charged that Amersham had caused Medicare to overpay for Myoview, a radiopharmaceutical drug used in certain medical procedures to detect heart disease. Myoview, which comes in multi dose vials of powder, is mixed with radioactive agents to make individual doses which are then injected into patients for cardiac imaging procedures. Medicare payment rates for Myoview were partly based on the number of doses per vial of Myoview. The Department of Justice claimed that Amersham gave Medicare false information as to how many doses were available in each vial which caused Medicare to overpay.

The fraud against the government in this case would have continued if James Wagel, the whistleblower, had not brought it to the government's attention. Wagel, who sold Cardiolite, which is a competing drug to Myoview, repeatedly heard from clients that they were purchasing Myoview because they were able to maximize the number of times each vial was used. Not only was this against the U.S. Food and Drug Administration guidelines but it also resulted in health care providers billing Medicare multiple times for the same product. Additionally, health care was being compromised as the drug was being diluted to get more use out of it.

Tony West, the Assistant Attorney General for the Justice Department's Civil Division, stated that it's "important for drug manufacturers to provide accurate pricing information to Medicare so that taxpayers aren't overcharged for medicines purchased with their dollars."

The qui tam provision of the False Claims Act allows an individual with knowledge of fraud being committed against the government to bring an action on behalf of the government. However, you must be represented by an attorney and you must be the first person to bring evidence of the fraud to the government's attention. In other words, you cannot reveal your story on Eyewitness News and then expect to bring an action. You may be entitled to anywhere from 15% to 30% of the government's recovery depending on whether the government intervenes and takes over your lawsuit.

Medicaid and Medicare fraud is a national problem affecting not just the government but also every taxpayer in this country. The qui tam whistleblower provision of the False Claims Act is a great tool to fight fraud against the government. Although it is a complex statute with strict requirements, the recovery can be quite substantial and worth the effort. However, it only works if you observe fraud and do something about it. If you have observed fraud being committed against the government at your workplace, call our experienced qui tam Whistleblower Attorneys at Villanueva & Sanchala at (800) 893-9645 to figure out if you have a case under the False Claims Act.

Continue reading "Whistleblower Exposes Medicaid Fraud Using False Claims Act and Makes Huge Recovery" »

The U.S. Department of Justice ("DOJ") recently settled allegations with Medronic, Inc., the world's larges maker of heart rhythm devices, who agreed to pay $23.5 million for violating the False Claims Act. The DOJ had charged the device maker with paying kickbacks to physicians who implanted its pacemakers and defibrillators in patients.

The lawsuits were commenced by whistleblowers under the qui tam provision of the False Claims Act. The whistleblowers will receive over $3.96 million from the government's recovery. If you have evidence of fraud being committed against the government, our attorneys can help you determine the strength of your claim.

Two lawsuits were filed against Medronic in federal court, one in California and one in Minnesota. The suits charged that the company paid physicians $1,000 to $2,000 for each patient who it implanted with one of the company's devices, in clear violation of the False Claims Act. Medtronic paid these doctors per implant for participating in studies of these devices, which were already on the market. The device maker then submitted false claims to Medicare and Medicaid using the post market studies and two device registries as a means to pay the physicians who were involved in the kickback scheme.

Tony West, the assistant attorney general for the DOJ's Civil Division, stated that "Patients who rely on their health-care providers to implant vital medical devices expect that those decisions will be made with the patients' best interests in mind." He added that "Kickbacks, like those alleged here, distort sound medical judgments with financial incentives paid for by the taxpayers."

The qui tam provision of the False Claims Act is probably one of the most important laws to help fight fraud against the government as well as taxpayers. If you have evidence of fraud being committed against the government, you may bring an action on behalf of the government under the False Claims Act. Depending on whether the government takes over your lawsuit, you may be entitled to 15% to 30% of the government's recovery. Most importantly, you must be the first person to bring the evidence of fraud to the government's attention.

The fraud committed here was not just about the money but also about whether unbiased medical judgment was used in healthcare. It is unnerving to think that your doctor may have persuaded you to undergo major surgery to implant a device or recommended a certain brand of device because he was receiving a kickback, and not because it was the best medical decision for you. Medicaid and Medicare fraud is a huge problem in the healthcare industry which the government can't fight and detect on its own. The False Claims statute is very complicated with strict requirements including a detailed process for filing, but the payoff and the satisfaction of exposing fraud can be enormous. If you know of fraud being committed against the government, call our experienced Whistleblower Attorneys at Villanueva & Sanchala at (800) 893-9645 to help you figure out if you have a claim under the False Claims Act.

Continue reading "Whistleblowers Use False Claims Act to Expose Medicaid and Medicare Fraud And Recover Huge Payoff" »

The Department of Justice recently announced a resolution with pharmaceutical giant Merck, Sharp & Dohme ("Merck") to pay $950 million to settle criminal and civil claims for its illegal promotion and marketing of its painkiller drug, Vioxx. As part of the deal, Merck has also agreed to enter into an expansive corporate integrity agreement with the Office of Inspector General of the Department of Health and Human Services to monitor its conduct.

Using its False Claims Act for the first time, New York State had joined in on bringing charges against Merck back in 2007 for Medicaid fraud. The State had alleged that Merck was risking the lives of thousands by inappropriately pushing Vioxx on physicians and patients. Pursuant to its False Claims Act, the State sought damages for the amount spent on Medicaid and other state health care programs to pay for drugs prescribed under false claims. Merck has settled the lawsuit with New York as well as several other states.

The FDA approved Vioxx in 1999 and by 2003, it had become the third largest selling drug, yielding $2.5 billion in sales. After a study found that it cause an increased risk of heart attacks and strokes, it was taken off the market in 2004.

Merck plead guilty to violating the Food Drug and Cosmetic Act ("FDCA") for placing Vioxx into interstate commerce and for its illegal promotional activity of Vioxx. The criminal pleas relates to Merck's off label promotion of Vioxx for treating rheumatoid arthritis ("RA") from 1999 to 2002, before it was approved by the Food and Drug Administration for that use. According to FDCA provisions, a company must specify the intended uses of a product in its new drug application to the FDA. The FDA only approved Vioxx for three uses in May 1999 and did not approve use of it for RA until April 2002. The government charged that Merck was promoting Vioxx for RA for almost three years and was even issued an FDA warning letter in September 2001.

Once the FDA approves the drug, the pharmaceutical company may not market or promote the drug for "off-label" uses, which refers to any use not specified in its application to the FDA. In other words, a drug company cannot take a drug approved by the FDA for treating migraines and then market it for high blood pressure. It is illegal to market a drug for uses other than those approved by the FDA. If you know of any fraudulent activity being committed against the government at your workplace, call our attorneys to help you determine if you have a qui tam whistleblower lawsuit under the False Claims Act.

The civil settlement pertains to allegations that Merck representatives made inaccurate, unsupported or misleading statements about Vioxx's cardiovascular safety in order to increase the drug's sales. This in turn increased the federal government's payments. The government had also charged that Merck made false statements to state Medicaid agencies regarding Vioxx's cardiovascular safety, which these agencies relied on and caused them to cover the drug. The settlement provides for the participating Medicare states to get a share of the recovery.

Off-label marketing by pharmaceutical companies and Medicaid fraud costs the government and taxpayers millions of dollars every year. If you have evidence about fraud being committed against the government, you can bring an action on behalf of the government. Depending on whether or not the government takes over your suit, you may be entitled to 15% to 30% of the recovery. Because of the statute's complexity and strict requirements, call our Attorneys at Villanueva & Sanchala at (800) 893-9645 to help you determine if you have a strong case under the False Claims Act.

Continue reading "New York State and Others Use False Claims Act to Fight Medicaid Fraud" »