DaVita to Pay $450 Million to Resolve Allegations that It Sought Reimbursement for Unnecessary Drug Wastage

Written June 29, 2015 by Robert Lu

On Wednesday, June 24, 2015, the U.S. Justice Department announced that DaVita Healthcare Partners Inc., the largest provider of dialysis services in the United States, has agreed to pay $450 million to resolve claims that it violated the False Claims Act.

The settlement resolves allegations brought by a whistleblower action, which said that DaVita devised and employed dosing grids and/or protocols specifically designed to create unnecessary waste of the drugs Venofer and Zemplar. These drugs are typically packaged in single-use vials, which are intended for one-time use by patients. Sometimes, the amount of the drug in the vials does not match the dosage specified by the physician, resulting in the remainder of the drug in the vial being discarded.

At the time of the alleged scheme, Medicare would reimburse a dialysis provider for certain waste if the dialysis provider – acting in good faith – discarded the remainder of the drug contained in a single-use vial after administering the requisite dose and/or quantity of the drug to a Medicare patient. According to the scheme alleged by the whistleblower action, DaVita instructed its employees to provide Zemplar to dialysis patients pursuant to mandatory and wasteful “dosing grids,” in order to maximize the amount of dosage prescribed to patients, thus maximizing Medicare reimbursements for DaVita.

The allegations resolved in the settlement arose from a lawsuit filed by two whistleblowers, Dr. Alon Vanier and nurse Daniel Barbir, under the qui tam provisions of the False Claims Act. Under the Act, private citizens can bring suit on behalf of the government for false claims and share in any recovery.

The lawsuit is captioned United States ex rel. Alon J. Vainer, M.D., F.A.C.P. and Daniel D. Barbir, R.N., Plaintiffs v. DaVita, Inc. and Gambro Healthcare, Inc., and their respective subsidiaries and affiliated companies, Defendants, No. 1:07-cv-2509-CAP (N.D. Ga.). The claims settled by this agreement are allegations only; there has been no determination of liability.

For additional information about the False Claims Act, and the Firm’s services and resources for whistleblowers in general, please visit the Robbins Geller Rudman & Dowd LLP whistleblower site.

Durable Medical Equipment Suppliers to Pay $7.5 Million to Resolve False Claims Act Allegations

Written June 2, 2015 by Robert Lu

The U.S. Justice Department announced Wednesday, May 27, 2015, that it had reached a $7.5 million settlement with two medical equipment suppliers, Orbit Medical Inc. and its partial successor Rehab Medical Inc., over allegations that the businesses filed false claims for power wheelchairs and accessories to federal health care programs.

Orbit Medical and Rehab Medical are durable medical equipment suppliers based in Salt Lake City and Indianapolis, respectively.

Medicare will only pay for power wheelchairs for individuals who cannot use other forms of equipment, such as a cane, walker or power scooter, to move around their homes and perform daily activities. Physicians must meet with individuals face-to-face, examine the person and provide a power wheelchair prescription within 45 days of the examination. The treating physician is also required to give documentation that shows the power wheelchair is medically necessary. In the complaint against Orbit, representatives were accused of altering prescriptions by physicians in order to get power wheelchairs paid for by Medicare.

The allegations resolved by the settlement with Orbit and Rehab were filed under the False Claims Act by two former Orbit employees, Dustin Clyde and Tyler Jackson. Under the False Claims Act, a private party can sue for false claims on behalf of the government and share in any recovery. Clyde and Jackson will receive approximately $1.5 million. The United States intervened in the suit on April 2, 2014.

The lawsuit is captioned United States ex rel. Clyde et al. v. Orbit Medical et al., No. 2:10-CV-00297 (D. Utah). The claims settled by the government are allegations only; there has been no determination of liability.

For additional information about the False Claims Act, and the Firm’s resources and services for whistleblowers, please visit the Robbins Geller Rudman & Dowd LLP whistleblower site.

Sixteen Hospitals Agree to Pay the United States Nearly $16 Million to Resolve False Claims Act Allegations of Submitting Claims for Medically Unnecessary Psychiatric Procedures

Written May 7, 2015 by Robert Lu

On May 7, 2015, the U.S. Justice Department announced that 16 separate hospitals (as well as their respective corporate parents) have agreed to collectively pay nearly $16 million to resolve allegations that they sought and received reimbursement from Medicare for medically unnecessary or unreasonable services in violation of the False Claims Act.

This case involves a procedure called Intensive Outpatient Psychotherapy (IOP). IOP services represent a continuation of ambulatory psychiatric services and provide active treatment to individuals with mental disorders. Medicare generally pays for an appropriate course of IOP treatment provided a number of specific requirements are satisfied including, most notably, that the services in question are reasonable and necessary for the diagnosis and treatment of the patient’s condition.
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United States Settles False Claims Act Allegations Against Laguna Beach Physician Over Kickback Scheme

Written March 4, 2015 by Robert Lu

On Monday, March 2, 2015, the U.S. Department of Justice announced that Dr. Charles Denham of Laguna Beach, California, and the former chair of the Safe Practices Committee of the National Quality Forum, has agreed to pay the United States $1 million to settle allegations that he violated the False Claims Act by soliciting and accepting kickbacks.

Dr. Denham is a patient safety consultant who operates Health Care Concepts and the research organization Texas Medical Institute of Technology, both of which were also named as parties in the lawsuit. In 2009 and 2010, he was also co-chair of the Safe Practices Committee of the National Quality Forum.

The settlement resolves allegations that, under agreements entered into in 2008, Dr. Denham received monthly payments from CareFusion Corporation while serving as the co-chair of the Safe Practices Committee, which reviews, endorses and recommends standardized healthcare performance measures and practices. The lawsuit further alleged Dr. Denham received the kickbacks in exchange for influencing the recommendations of the National Quality Forum and for recommending, promoting and arranging for the purchase of CareFusion’s product, ChloraPrep, in violation of the Federal Anti-Kickback Statute. The United States alleged that this conduct caused the submission of false or fraudulent claims for ChloraPrep to federal health care programs because a violation of the Anti-Kickback Statute is a predicate offense under the False Claims Act statute.

Although Dr. Denham has agreed to this settlement, there has been no determination of liability.

Justice Department Intervenes in False Claims Act Cases Against Florida Cardiologist

Written January 5, 2015 by Robert Lu

On Monday, January 5, 2015, the U.S. Justice Department announced it joined two whistleblower lawsuits, filed pursuant to the False Claims Act, against one of the highest-billing doctors in the Medicare program.

The two whistleblower suits alleged that Ocala, Florida, cardiologist Asad Qamar, viagra super active and and his physician group, the Institute for Cardiovascular Excellence PLLC (ICE), performed and billed for numerous procedures that were medically unnecessary, and illegally waived co-payments so that patients would not question treatment recommendations.
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Amedisys Home Health Companies Agree to Pay $150 Million to Resolve Medicare Fraud False Claims Act Allegations

Written May 14, 2014 by Janine Arno

Last month, the U.S. Department of Justice announced that it had entered into a $150 million settlement with Amedisys Inc. and its affiliates to resolve claims concerning the company’s Medicare billing practices.  Amedisys is one of the largest providers of home health services in the United States.
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Florida Hospital System Agrees to Pay $85 Million to Settle Medicare Fraud False Claims Act Whistleblower Case

Written March 14, 2014 by Janine Arno

Halifax Hospital Medical Center and Halifax Staffing Inc. (Halifax), a Daytona Beach, Florida area hospital system, have agreed to pay $85 million to settle a Medicare fraud whistleblower lawsuit.   The lawsuit alleged that Halifax violated the False Claims Act by submitting claims to Medicare that violated the Physician Self-Referral Law, known as the “Stark Law.”
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Endo Pharmaceuticals Settles False Claim Act Case Over Liboderm Patch for $172 Million

Written February 25, 2014 by Robert Lu

On February 21, 2014, the U.S. Attorney’s Office for the Eastern District of Pennsylvania announced that pharmaceuticals company Endo Health Solutions, Inc. and its subsidiary Endo Pharmaceuticals Inc. (Endo), which is headquartered in Malvern, Pennsylvania, have agreed to pay $171.9 million to resolve civil allegations of off-label marketing of their adhesive pain patch Lidoderm.
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Saint Joseph Health System Inc. Agrees To Pay Government $16.5 Million To Settle False Claims Act Lawsuit

Written February 1, 2014 by Robert Lu

On January 29, 2014, the U.S.

Department of Justice announced that Saint Joseph Health System Inc. has agreed to pay the government  $16.5 million to resolve civil allegations that it submitted false or fraudulent claims to the Medicare and Kentucky Medicaid programs for a variety of medically unnecessary heart procedures.
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St. Mary Medical Center Agrees to Pay $2.4 Million to Settle False Claims Act Allegations

Written January 14, 2014 by Robert Lu

The U.S. Attorney’s Office for the Eastern District of Pennsylvania announced on January 6, 2014, that it had settled claims under the False Claims Act with St. Mary Medical Center (SMMC) for improperly administering certain physician income guarantee agreements.  SMMC agreed to pay $2,339,224 to resolve the matter.

According to the government’s investigation, between January 2005 and August 2010, SMMC used 15 physician income guarantee agreements for recruited physicians but failed to properly administer the terms of their agreements, which resulted in net overpayments to certain recruited physicians.  Because those physicians and their practices referred patients to SMMC for medical treatment that was billed to federally funded programs, the United States alleged that false claims were submitted to the government.

This matter was handled by Department Health and Human Services Office of the Inspector General, and the U.S. Attorney’s Office for the Eastern District of Pennsylvania.