Health Care Lawyer Blog

The State of Michigan has intervened in a state false claims act suit filed against clinical laboratory company Quest Diagnostics, Inc., alleging that the company defrauded the state Medicaid program by overcharging for lab tests.

The suit was originally filed in 2008 under the Michigan Medicaid False Claims Act by relators Chris Riedel and Hunter Laboratories, LLC, who alleged that Quest submitted false claims by billing the Michigan Medicaid program a higher cost for lab tests than it charged to private payors. The Michigan Medicaid guidelines forbid providers from charging Medicaid higher rates than those billed to others for the same or similar services.

According to the original complaint, Quest charged private payors lower prices to ensure a continued stream of business, and then “subsidized” their losses by charging the Michigan Medicaid program higher prices in violation of the Medicaid guidelines. In some cases, the complaint alleged that Quest charged the Medicaid program triple or even quadruple the cost charged to private payers.

After the jump - more allegations against Quest

Continue reading "State of Michigan Intervenes in Fraud Lawsuit Against Quest Diagnostics" »

GE Healthcare, a global provider of medical technologies and pharmaceuticals, has agreed to pay $30M to resolve allegations that it knowingly provided false or misleading information to the federal Medicare program in connection with the distribution of Myoview.

For the full press release, click here.

The Troy, Michigan law firm of Frank Haron Weiner, PLC, in conjunction with the United States Department of Justice and the Texas Attorney General’s Office, today announced a settlement of $2,470,000, plus statutory attorney fees of $130,000, with the City of Dallas to resolve allegations of improper Medicare and Medicaid billings.

The settlement stems from a lawsuit filed by the firm in 2009 under the qui tam provisions of the federal False Claims Act and the Texas Medicaid False Claims Act. The federal False Claims Act (and similar state legislation, such as the Texas Act) allows private individuals with knowledge of fraud against the government to file lawsuits on the government’s behalf. If the case is successful, the private plaintiffs, known as “relators,” are entitled to a percentage of the monies recovered by the government.

Relator Douglas Moore’s complaint, filed in the U.S. District Court for the Northern District of Texas, alleged that from January 2006 to May 2010, the City of Dallas knowingly defrauded the Medicare and Texas Medicaid programs by improperly billing for certain ambulance transport services. Specifically, Moore alleged that the company hired by the City of Dallas to perform ambulance-service billing, Southwest General Services of Dallas, LLC, coded 100 percent of the City’s 911-dispatch ambulance transports at the Advanced Life Support (“ALS”) level, regardless of whether the patient’s medical condition justified the claim or if an ALS-level service was actually furnished. Relator alleged that many runs should have been coded and billed as basic life support (“BLS”), which is reimbursed at a lower rate by both Medicare and Medicaid. Accordingly, Moore alleged that the City received higher Medicare and Medicaid reimbursements than it was entitled to and was at all times aware of Southwest General Services of Dallas, LLC’s activities.

Continue reading "FHW False Claims Act Lawsuit Results in $2.4M Settlement For Ambulance Overbilling" »

Since the False Claims Act (FCA) is regularly used in cases involving health care fraud, the Health Care Lawyer Blog covers significant FCA activity.

The Supreme Court held this morning that a federal agency’s written response to a request for records under the Freedom of Information Act (FOIA) constitutes a “report” within the meaning of the FCA's public disclosure bar. The 5-3 decision (Kagan, J. recused herself) resolved a longtime split amongst the circuits and will have significant impact on FCA plaintiffs and their counsel going forward.

Background

Generally, the federal FCA prohibits a private plaintiff (often referred to as a relator or whistleblower) from filing an action that is “based upon the public disclosure of allegations or transaction in a criminal, civil, or administrative hearing, in a congressional, administrative, or Government Accounting Office report, hearing, audit or investigation, or from the news media.” See 31 U.S.C. 3730(e)(4)(A), amended by the 2010 Patient Protection and Affordable Care Act, this amendment will be discussed in detail below. Frequently referred to as the “public disclosure bar”, this provision was included in the legislation to prevent “parasitic” lawsuits and ensure that cases were only filed by insiders with personal knowledge of fraud against the government.

In Schindler Elevator Corp. v. United States ex rel. Kirk, a private plaintiff filed an FCA lawsuit against defendant Schindler Elevator Corp. Kirk alleged that defendant, a contractor with the Department of Defense, failed to comply with certain regulations and thus all claims submitted to the government for payment were fraudulent. In support of his allegations that the defendant falsely complied with the regulations, Kirk relied on information that his wife had obtained from the Department of Labor in response to three FOIA requests.

Schindler moved to dismiss Kirk’s suit, claiming in pertinent part that the information in the FOIA reports constituted a “public disclosure” and Kirk’s suit was thus barred. The District Court granted the motion, and Kirk appealed to the Second Circuit Court of Appeals.

On appeal, the Second Circuit vacated and remanded, holding that an agency’s response to a FOIA request is neigh a report nor an investigation within the meaning of the public disclosure bar. Schindler appealed.

After the jump - analysis of the Court's opinion and what the case means to FCA cases

Continue reading "Supreme Court: FCA Actions Cannot Be Based Upon Information Obtained Via FOIA Requests" »

A federal appeals court has rejected a challenge brought by the American Civil Liberties Union (ACLU) that the seal provisions of the federal civil False Claims Act are unconstitutional.

The federal False Claims Act, which was enacted by President Abraham Lincoln during the Civil War, permits a private individual with knowledge of fraud against the federal government to file suit on the government’s behalf. Although initially enacted to deter fraud against the Union Army, the False Claims Act (FCA) has been increasingly used to combat fraud against government-funded health care programs.

The statutory provisions of the FCA require the complaint to be filed under seal for a 60-day period to permit the government to investigate the claims brought by the private plaintiff or “relator”. While the case is under seal, the complaint and other pleadings are not available on the federal court docket; the defendant is not served with or otherwise put on notice of the complaint; and the relator is prohibiting from speaking about the allegations involved.

Last fall the ACLU filed a lawsuit in the Eastern District of Virginia, alleging that the FCA’s seal provisions violate the public’s First Amendment right of access to judicial proceedings. Additionally, the ACLU alleged that the seal provisions violate the First Amendment by “gagging” relators, and infringe on a court’s inherent authority to decide on a case-by-case basis whether a particular complaint should be sealed or not. The district court rejected the ACLU’s claims and granted appellees’ motion to dismiss.

After the jump - Court Addresses ACLU Challenges

Continue reading "Appeals Court Rejects ACLU's Challenge to Constitutionality of Whistleblower Law" »

While pharmaceutical companies usually hope to make headlines with breakthrough cures or blockbuster drugs, this year "Big Pharma" has instead won the dubious accolade of "Most Likely To Defraud The Federal Government".

According to the advocacy group Taxpayers Against Fraud, during fiscal year 2010 pharmaceutical companies made up eight of the top ten settlements related to fraud. The number one spot went to drugmaker Allergan, Inc., which shelled out $600 million to settle allegations that it marketed the anti-wrinkle injection Botox for unapproved uses.

Many of the settlements pertained to off-label marketing, which has landed many drugmakers in hot water over the past decade. Federal laws prohibit pharmaceutical manufacturers from marketing drugs for uses other than those approved by the FDA (i.e., "off-label uses"), and any monies paid out as a result of such off-label marketing are subject to the federal False Claims Act.

Even today, federal officials announced that drugmaker GlaxoSmithKline (GSK) will pay $750 million to resolve allegations that the company distributed adulterated and improperly made drugs.

The drug company settlements a part of over $3.1 billion in recoveries made under the federal False Claims Act. According to Taxpayers Against Fraud, this year’s number was less than last year’s total of $5.6 billion. Statistics also showed that while health care does not have a monopoly on fraud claims – cases also arose relating to defense, education, transportation, and oil and gas companies – the top ten cases involved health care fraud, and eight of those ten involved drug makers. The $3.1 billion was divided among 145 total fraud cases settled in 2010, and the top ten accounted for $2.7 billion. In other words, 7% of the fraud cases settled accounted for 87% of the government’s total dollar recovery. While it appears that pharmaceutical companies are slowly changing their business practices, attorneys say that there are more cases in the pipeline, and motivated by the $15 return for every dollar invested in these cases, the federal government remains willing to pursue them.

After the jump - details on the top ten recoveries.

Continue reading "Pharma Companies Top List Pertaining to Fraud Settlements" »

The American Hospital Association (AHA) has issued a letter to the Department of Justice (DOJ) and Department of Health and Human Services (HHS) requesting a “policy review” of ongoing enforcement initiatives under the False Claims Act – in other words, requesting that the government “ease up” on its efforts to combat fraud and abuse.

In the September 7, 2010 letter, the AHA cites concerns that member hospitals are being subjected to “aggressive FCA actions” based on billing errors, mistakes or “non-culpable overutilization”. As one specific example, the letter cites to the recent investigations stemming from a May 2010 settlement wherein nine hospitals across the county agreed to pay more than $9.4 million to settle allegations involving kyphoplasty procedures. Kyphoplasty is a minimally-invasive procedure used to treat spinal fractures due to osteoporosis. In many cases, the procedure can be safely performed as an outpatient procedure; however, allegations surfaced that the hospitals performed the procedures on a (more costly) in-patient basis in order to increase Medicare billings.

According to the AHA, hospitals have complained that following the settlement, DOJ is sending hospitals “contact” letters establishing “a data-driven presumption that a hospital billing for an inpatient stay following a kyphoplasty ‘knowingly’ violated the FCA and will be liable for treble damages and penalties.” The AHA contends that such a position forces the hospital to undertake a “prescribed onerous, burdensome, and very costly self-audit” and that member hospitals are being threatened with FCA liability in the event they do not cooperate. In sum, “DOJ is using the threat of FCA liability as an audit tool.”

Continue reading "Hospitals Allege Overuse of False Claims Act by DOJ, HHS" »

When a federal False Claims Act/qui tam case is successful, the media coverage naturally focuses on the amount returned to the government – and, much of the time, the relator’s share or “bounty payment” received by the whistleblowers. For example, last year’s Pfizer relators made headlines when it was announced that the group of six relators would share in a $106 million reward as their part of the federal recovery.

However, not all such qui tam cases result in the proverbial happy ending – and, even if they do, the cases often take a significant toll on the relators who choose to come forward. A recent article in the New England Journal of Medicine (NEJM) discusses in detail the challenges faced by whistleblowers, which include being blacklisted in their industry, personal and/or financial difficulties, and health problems caused by the strain of litigation.

The article, entitled “Whistleblowers’ Experiences in Fraud Litigation Against Pharmaceutical Companies,” summarized the NEJM’s findings after interviews with 26 whistleblowers involved in 17 federal qui tam cases against pharmaceutical manufacturers settled between January 2001 and March 2009. Although all the relators interviewed ended up filing qui tam suits, only six specifically intended to do so. The others “fell into” filing qui tams after seeking out attorneys for other reasons, such as unfair employment practices or harassment, or after being encouraged to file suit by family or friends.

The federal False Claims Act dates back to the Civil War, when President Abraham Lincoln enacted the law to deter individuals from supplying rotten food or sawdust-filled gunpowder to the Union Army. Since resources were strained by the war and the government could not police fraud itself, it relied on private individuals to bring fraud to its attention. However, realizing that private individuals would need some incentive to do so, a relator’s share provision was incorporated into the statute.

After the jump -- Why Blowing the Whistle is No Easy Task

Continue reading "Health Care Whistleblowers Report Retaliation, Divorce and Financial Strain, According to NEJM" »

The law firm of Frank, Haron, Weiner and Navarro, in collaboration with the United States Attorney’s Office for the District of Massachusetts and the firm of Phillips & Cohen LLP, has reached a settlement with two Johnson & Johnson subsidiaries to pay more than $81 million to resolve criminal and civil liability arising from the off-label marketing of the epilepsy drug Topamax.

The settlement arose from two whistleblower cases filed under federal and state False Claims Acts, alleging that Otho-McNeil Pharmaceutical LLC and Ortho-McNeil-Janssen Pharmaceuticals, Inc., improperly marketed Topamax for psychiatric uses, when it was only FDA-approved to treat epilepsy. Federal laws prohibit drugmakers from marketing drugs for uses other than those specified in drug applications and approved by the FDA.

The complaint alleged that Ortho-McNeil promoted off-label uses of Topamax by hiring physicians to speak at meetings and dinners about prescribing for unapproved uses, and rewarded such physicians with lavish “honorariums”, trips, and tickets to entertainment events.

Under the settlement, the federal government will receive over $50 million and an additional $24 million will be allocated for the state Medicaid share. Additionally, Ortho-McNeil has agreed to plead guilty to a misdemeanor and pay a $6.14 million criminal fine.

The two cases, both filed in the District of Massachusetts are United States ex rel. Maher, et al. v. Ortho-McNeil Pharmaceutical, Civil Action No. 03-11445-WGY, and United States ex rel. Spivack v. Johnson & Johnson and Ortho-McNeil Pharmaceutical, Inc., Civil Action No. 04-11886-WGY. As part of the settlement, the relators will receive a combined $9 million relator’s share.

FHWN attorneys David L. Haron and Monica P. Navarro represented relators Maher and Savka. Phillips and Cohen represented relator Spivack.

To read the settlement agreement, click here.

Drugmaker AstraZeneca has agreed to pay $520 million to settle charges that it illegally marketed its anti-psychotic drug Seroquel, the Department of Justice announced today.

The settlement, which arose from allegations in a civil False Claims Act lawsuit that the company marketed its anti-psychotic drug Seroquel for purposes not approved by the Food and Drug Administration, was the largest ever by a company in a civil-only settlement of off-label marketing claims. However, $520 million (without knowing the details on how the damages were calculated) seems a paltry sum considering that Seroquel sales ranged as high as four billion per year.

The complaint alleged that from January 2001 to September of 2006, AstraZeneca marketed Seroquel to psychiatrists and other physicians to treat aggression, Alzheimer’s disease, anxiety, ADHD, and a slew of other illnesses for which Seroquel was not FDA-approved to treat. The marketing efforts failed to disclose the side effects from such off-label uses, which included extreme weight gain.

As a condition of the settlement, AstraZeneca also entered into a five-year Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector general. CIAs are generally designed to implement a series of administrative hoops that ensure compliance with government mandates. Among other provisions, the AstraZeneca CIA provides that a board of directors committee and certain managers must annually review the company’s compliance program and approve its effectiveness. However, the CIA terms essentially places monitoring responsibilities in the hands of the original wrongdoers. Additionally, the CIA does not require the company to take any actions to correct the misinformation given to physicians about the drug.

Frank, Haron, Weiner and Navarro, in collaboration with the United States Attorneys Office for the Eastern District of Michigan, has settled a false claims suit against SCCI Hospitals of America,Inc. (SCCI), a provider of specialized long-term acute hospital care (an “LTACH”), to recover $830,166 in payments allegedly misappropriated from Medicare.

The lawsuit was filed on May 18, 2005 by the law firm under the qui tam provisions of the federal False Claims Act (31 U.S.C. 3729 et seq.) on behalf of Teri Hall-Dutts, R.N., Robert Kuzina and Donna Rudolph, R.N., in the U.S. District Court for the Eastern District of Michigan in Case No. 05-40351. On July 26, 2006, Christine Paulus and Angela DeGrez, represented by Patricia Stamler of the Bloomfield Hills, Michigan law firm, Hertz Schram, filed a similar lawsuit in Case No. 06-13393. The cases were consolidated in September, 2007 and the settlement announced here resolves both cases.

The settled law suits claimed that, between October 1, 2004 and September 30, 2005, SCCI submitted claims to the Medicare Program for services provided by SCCI Detroit which were not medically necessary because they were provided beyond the date when the patient should have been discharged, or because the patient did not meet admission criteria for an LTACH. SCCI, headquartered in Houston, Texas, operates Long-Term Acute Care Hospitals in several states but the subject matter of the lawsuits were the operations of its facility in Detroit, Michigan. SCCI previously settled another suit in 2007 for $75 million for conduct from 1996-1999 involving numerous Texas locations.

The Relators will share an award of 20.5 percent of the settlement or $170,184.11. The defendant also agreed to pay $107,983.89 for Relators’ expenses and attorney fees. In settling the suit the defendant neither admitted liability nor did the government conclude that the claims were not well founded.

After the jump - why the FCA is crucial to combating fraud

Continue reading "Detroit Long-Term Care Facility to Pay Back Over $800K in Medicare Fraud Settlement" »

Stopping health care fraud is by no means an easy task. New figures released by the U.S. Department of Justice, however, reveal hundreds of instances where whistleblowers have reported health care fraud, but the U.S. Government has let the cases languish for months or even years while deciding whether to get involved. In effect, the government has been tipped off on potential fraud, but has not taken action.

According to numbers released from the U.S. Department of Justice (USDOJ) to Sen. Charles Grassley (R-Iowa), there are currently 985 health care-related qui tam/False Claims Act cases pending a decision from the USDOJ on whether or not to intervene. Under the federal False Claims Act, a private individual who is aware of fraud against the government can file a whistleblower or "qui tam" lawsuit against the defendants. Once the case is filed, the government must make a decision to intervene. However, as noted by Grassley, such cases often sit stagnant for months or even years while the government makes an intervention decision. Specifically, USDOJ data shows that on average, it takes the Department of Justice 12.3 months to decide whether to intervene on a case.

“These cases were brought forward by patriotic individuals who are sticking their necks out to do what’s right. We can’t just let these whistleblowers sit in limbo for years while the federal bureaucracy takes its time deciding what to do,” Grassley said in a statement Thursday. “I want to know what the Justice Department needs in order to speed up these decisions. People who put everything on the line to speak up when they think there’s fraud against the taxpayers can’t live their lives this way.”

Click here for the full report.

Last week drug giant GlaxoSmithKline announced a new standard for funding continuing medical education (CME) programs for health care providers – a sign that drugmakers are responding to public outcry and recent settlements involving improper marketing practices. Specifically, starting in 2010 GSK will fund only independent medical education programs that “are clearly designed to close gaps in patient care, and that demonstrate support for the optimal performance of health care professionals.”

Paying health care practitioners hefty sums to host/attend sham “continuing medical education” junkets as an inducement for prescribing pharmaceuticals has long been a standard industry practice. However, drugmakers have been slammed in recent years with False Claims Act cases alleging that pharmaceutical companies engaged in extensive “off-label marketing”, a term used to describe the practice of marketing drugs for non-FDA approved uses. Earlier this month, the Department of Justice announced the largest False Claims Act settlement in history with drugmaker Pfizer. Specifically, Pfizer will pay $2.3 billion to settle allegations that it improperly marketed numerous pharmaceuticals, including by paying physicians hefty sums for sham “speaking engagements” to induce them to prescribe drugs for off-label purposes.

According to the GSK press release, the drugmaker will invite grant applications for CME from medical education providers with “a documented track record of developing and delivering high quality medical education delivering high quality medical education programs that have a measurable impact on improved patient health. Potential grant applicants will be limited to academic medical centers and their affiliated teaching and patient care institutions, as well as national-level professional medical associations that represent healthcare professionals responsible for the delivery of patient care. All selected providers must be directly accredited by a recognized accrediting body.” GSK will also post all approved grants on its website, www.us-gsk.com.

After the jump - have the tides finally turned for Big Pharma?

Continue reading "GSK Announces New CME Standard Following Drug Industry Shake-Up" »

The firm of Frank, Haron, Weiner and Navarro has collaborated with the United States and Michigan governments to settle a false claims suit against St. John Health System for $822,000.

The lawsuit was filed in 2008 by the law firm under the qui tam provisions of the federal False Claims Act, Title 31, United States Code, Section 3730 (b) –(h) on behalf of Maria Hoepner and Frank Pink, D.D.S.

The Act (and similar state Acts, such as the Michigan Medicaid False Claims Act) provides incentives to private citizens, called Relators, who discover fraud against the federal government and who bring their information to the government and help pursue the defrauding entities. The qui tam provisions allow Relators to represent the interest of the government for damages and civil penalties for a violation of law, and if the action is successful, a portion of the recovery is provided to the Relators.

Ms. Hoepner was formerly the Clinic Coordinator for a dental clinic operated jointly by St. John Health System and the University of Detroit at St. John Detroit Riverview Center. Dr. Pink was a supervising and billing dentist at the clinic. The law suit claimed St. Johns Health System submitted or caused to be submitted claims to the Medicaid program, for dental or oral/maxillofacial care on behalf of three health care professionals at St. John Riverview Center.

Continue reading "Michigan Health Care Fraud Case Settled for $800,000 Against St. John" »

As I reported earlier, the Michigan Medicaid False Claims Act was amended effective January 1, 2006 through the efforts of Attorney General Mike Cox and Representative David Law (R., Commerce). I worked actively for passage of the amendment and testified before the Michigan House of Representative Judiciary committee, then chaired by Rep. Law..

The State of Michigan can recoup extra funds from combined state/federal recoveries because of the provisions of the federal Deficit Reduction Act of 2005 ('DRA"). To explain, shortly after the the Michigan Medicaid False Claims Act amendment passed the Michigan Legislature and Governor Granholm signed the Act, the U.S. Congress passed the DRA providing for a 10% incentive to States which enacted a "compliant" Qui Tam statute addressing Medicaid fraud. Specifically, the Medicaid program is a joint federal/state program. Thus, in Michigan, the federal government pays about 56% and the state 44% of the costs of the Medicaid program and fraud recoveries are divided on the same percentage.

If the state has a "compliant" Qui Tam statute, the state receives an extra 10% of the recovery--that is, 54% in Michigan--of the recovery--instead of 44%--a significant amount of money since most recoveries are in the tens of millions of dollars or more!!

However, on December 21, 2006, the U.S, Department of Health and Human Services/Office of Inspector General ("HHS/OIG") advised the state, by letter, that its Medicaid False Claims Act was NOT "DRA compliant" (that is, a mirror image of the federal False Claims Act).

In order to comply, all that was needed was a simple bill adding civil monetary penalties of at least $5000 for each violation and making one other technical amendment. Since the revisions would not have had any negative fiscal impact on the state and would have had a potentially tremendous positive impact in the event of any recovery, one would have expected Representative Law to quickly introduce a clarification/modification bill and obtain quick passage--after all, the State would most certainly not turn down the opportunity to reverse the flow of funds from Michigan to Washington??

Unfortunately, in 2006 and 2007, petty partisan bickering was rampant in the Michigan Legislature--we were paralyzed by the absurd budget fight and leadership was non-existent.

Rep. Law, finally, on September 17, 2007, introduced a one-page bill. The date of introduction is significant. In addition to being a Saturday, the day of the Notre Dame-UM football game (a game, I suspect, Rep. Law, a Notre Dame grad, was attending), it was three days before Ray Sayeh, then a WXYZ-TV investigative reporter, had scheduled (at my request) an interview with the representative to discuss the failure to take action on the revisions.

Unfortunately, again because of partisanship and Democratic control of the House of Representatives, the bill went nowhere while the Attorney General continued to obtain recoveries from fraud-feasors and the unclaimed 10% incentive was lost to Washington.

Finally, on February 19, 2008, Representative Marc Courveau (D., Northville) introduced HB 5757. The amended FCA, as presented in HB 5757, would allow the Michigan FCA to become DRA compliant. Once again, the small changes made by HB 5757, as required by the federal HHS/OIG., would cost the state nothing in administrative or other costs and would bring millions of dollars in the future back from Washington.

HB 5757 quickly passed the House with NO opposition and was sent to the Senate.

Tragically, because of continued political maneuvering, the Bill sits in the Judiciary Committee.

It seems that Rep. Courveau was elected at the expense of a Republican and the leadership of the Judiciary Committee and Senate Majority Leader, Mike Bishop will not allow this largely unopposed, fiscally responsible bill, to be brought up at the committee or floor level because it would give "points" to Rep. Courveau!!!!

The State of Michigan is in a deep recession/depression, unemployment sits at 8.5%, the highest in the nation, GM is in deep trouble, the City of Detroit is selling assets and landmarks--such at the Detroit-Windsor tunnel--and the Legislature cannot pass a one-page bill that will bring money to the state and its Medicaid recipients.

This Bill is under the radar, unfortunately--Ray (now Rez) Sayeh has joined CNN International and is posted in Pakistan, columnists such as Brian Dickerson and others have been unresponsive despite my entreaties, my solicitations to the Legislature and the use of my contacts have been unavailing.

I am frustrated. Medicaid fraud is rampant, the Attorney General is acting diligently in pursuing the cheaters, and we have been filing qui tam cases under the new Act, but even if all of these activities are successful--and they will be--the State will not receive the full benefit of its recoveries!!!

I will not stop my efforts, but it will take action by my readers to move this along. Sen. Mike Bishop may be contacted by email and his office phone number is (517) 373-2417.

The other Senators on the Judiciary Committee may be emailed at:

senwkuipers@senate.michigan.gov Sen. Kuipers - Chair

senacropsey@senate.michigan.gov Sen. Cropsey

senasanborn@senate.michigan.gov Sen. Sanborn

senbpatterson@senate.michigan.gov Sen. Patterson

sengwhitmer@senate.michigan.gov Sen. Whitmer - minority vice-chair

senhclarke@senate.michigan.gov Sen. Clarke

senmprusi@senate.michigan.gov Sen. Prusi

Our firm published a series of articles in the Summer, 2008 edition of Michigan Medical Law Report.

Michigan Medical Law Report is published by Dolan Media Company. Frank, Haron, Weiner & Navarro was asked to contribute to this prestigious magazine sent to 20,000 practitioners.

Michelle Bayer's article on Internet pharmacies is entitled "They're efficient, but mail-order Internet pharmacies have intricate legal requirements."

Mercedes Varasteh's article entitled "Joint Commission standard fosters collaboration between medical staffs, hospitals" covered the application of MS 120.

Louis Szura wrote on revisions to Section 179 of the Internal Revenue Code in an article, "Economic Stimulus Act offers big tax breaks for health care providers."

David Haron instructed providers on the federal False Claims Act in "Exposing fraud and abuse--what a private citizen may do."

Finally, Melinda Balian and Ross Hammersley gave excellent employment related information in "Employees--your biggest risk and your biggest ally."

NAMFCU is the National Association of Medicaid Fraud Control Units ("MFCUs"). Recently NAMFCU held its annual "Practical Skills" Conference in Denver, Colorado.

The Conference, for state Attorneys General and their assistants and staff involved in state Medicaid anti-fraud enforcement and collection activities provided the following information, in addition to training sessions, to the attendees:

1. A report on the rising level of national cooperation and information, expertise, and skill sharing among MFCU units, and with the Department of Justice.

2. A report on the level of sophistication and training that assistant AGs in all the state MFCU units are receiving at a national level.

3. A report on the involvement of non-Qui Tam States (those without Qui-Tam statutes--about 27) in the fight against health care fraud. They are investing significant investigatory resources and working with relators' counsel with respect to cases that don't even name those states.

The Michigan Medicaid False Claims Act was amended effective January 1, 2006 through the efforts of Attorney General Mike Cox and Representative David Law (R., Commerce). I worked actively for passage of the amendment and testified before the Michigan House of Representative Judiciary committee, then chaired by Rep. Law.

The Amendment brought Michigan into line with 22 other progressive states by adding a Qui Tam provision to the existing Medicaid False Claims Act. According to Wallace Hart, an Assistant Attorney General, actively involved in fraud control, the amendments--giving private citizens the right to bring Qui Tam suits to recover fraudulent monies stolen from the taxpayers by providers treating the Medicaid program as their own private ATM machine--the amendment helped him reduce his in-box.

The Michigan Medicaid False Claims Act prohibits the presentment of any false or fraudulent claim for payment under the Social Welfare Act – namely, for Medicaid benefits. The law currently provides for the State to recover the full amount received by a Medicaid provider due to fraudulent conduct, plus triple the amount of damages suffered by the State as a result of the conduct.

HB 5757, a bill pending before the Michigan Senate after having passed the House in near unanimous fashion, would allow the State of Michigan to recoup extra funds from combined state/federal recoveries because of the provisions of the federal Deficit Reduction Act of 2005 ('DRA"). To explain, shortly after the the Michigan Medicaid False Claims Act amendment passed the Michigan Legislature and Governor Granholm signed the Act, the U.S. Congress passed the DRA providing for a 10% incentive to States which enacted a "compliant" Qui Tam statute addressing Medicaid fraud. Specifically, the Medicaid program is a joint federal/state program. Thus, in Michigan, the federal government pays about 56% and the state 44% of the costs of the Medicaid program and fraud recoveries are divided on the same percentage.

If the state has a "compliant" Qui Tam statute, the state receives an extra 10% of the recovery--that is, 54% in Michigan--of the recovery.

Continue reading "David Haron Testifies on Michigan Medicaid False Claims Act Revisions" »

Recently I acted as moderator and presenter for an ABA Business Law Section Teleconference discussing “Qui Tam: What Business Lawyers Need to Know.”

Federal and state False Claims Acts allow a private person to file a qui tam suit to recover monies wrongfully paid to providers by federal or state governments as a result of false claims the defendant made to the government. For example, if a physician practice group is overcharging Medicare, a person can file a sealed qui tam lawsuit that will trigger an investigation, allow the government to recover up to triple damages, as well as fines and penalties, and potentially, receive a substantial reward.

The teleconference I participated in covered:

Bringing a Qui Tam suit.
Avoiding a suit through the use of compliance mechanisms.
Reacting to internal complaints made by whistleblowers.
The employment status of whistleblowers.
Internal investigations, releases, confidentiality and severance agreements.
Do your knees knock when the FBI comes calling.

We are one of the leading Qui Tam firms in the nation, but through the knowledge gained in such representation, we counsel employers and providers in compliance matters and in the implementation of procedures and policies designed to avoid such actions.

Qui Tam health care settlements occur regularly resulting in substantial recoveries for the governments of the United States and the various individual states from providers of false and fraudulent claims to the Medicare, Medicaid and other government programs.

On May 2, 2008, McKesson Corporation, a national distributor of branded and generic prescription medications, agreed to settle allegations that it violated federal reporting provisions relating to the sale of certain prescription medications regulated by the Drug Enforcement Administration announced United States Attorney Rod J. Rosenstein. Under the agreement between the company and six United States Attorney’s Offices, including the District of Maryland, McKesson has agreed to pay $13,250,000 in civil penalties, $2 million of which relates to conduct allegedly occurring at McKesson’s Landover, Maryland facility. In addition, McKesson has entered an administrative agreement with DEA in which it agrees to implement new policies and procedures to detect and prevent drug diversion beyond those currently required by federal regulation.