Archive for January, 2014

Saint Joseph Health System Inc. of Kentucky Agrees to Pay Government $16.5 Million to Settle Allegations of Unnecessary Cardiac Procedures

Saint Joseph Health System Inc. has agreed to pay $16.5 million to resolve allegations that Saint Joseph Hospital violated the False Claims Act by submitting false claims to the Medicare and Kentucky Medicaid programs for a variety of medically unnecessary cardiac procedures, the Justice Department announced today. Saint Joseph Health System operates numerous hospitals statewide, including Saint Joseph Hospital, which is based in London, Ky.

 “Hospitals that place their financial interests above the well-being of their patients will be held accountable,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “The Department of Justice will not tolerate those who abuse federal health care programs and put the beneficiaries of these programs at risk.”

 The government alleged that doctors working at Saint Joseph Hospital performed numerous invasive cardiac procedures, including coronary stents, pacemakers, coronary artery bypass graft surgeries and diagnostic catheterizations, on Medicare and Medicaid patients who did not need them, and that the hospital was aware of these unnecessary procedures. These doctors were affiliated with Cumberland Clinic which is a physician group that entered an exclusive arrangement with Saint Joseph Hospital in 2008 to provide cardiology services to the hospital’s patients. Cumberland Clinic is owned by two London-based cardiologists, Satyabrata Chatterjee and Ashwini Anand.

 The settlement also resolves allegations that Saint Joseph Hospital violated the federal Stark Law and Anti-Kickback Statute by entering into sham management agreements that financially benefitted Chatterjee and Anand as an inducement for Chatterjee and Anand to direct more Cumberland Clinic patients to the hospital.

Read rest of story here


General Electric Hitachi Nuclear Energy Americas Agrees to Pay $2.7 M for Alleged False Claims Related to Design of Advanced Nuclear Reactor

The Justice Department announced today that General Electric Hitachi Nuclear Energy Americas LLC (GE Hitachi) has agreed to pay $2.7 million to resolve allegations under the False Claims Act that it made false statements and claims to the Department of Energy and the Nuclear Regulatory Commission (NRC) concerning an advanced nuclear reactor design. GE Hitachi, a provider of nuclear energy products and services headquartered in Wilmington, N.C., is a subsidiary of General Electric Company (GE) that is also partially owned by Hitachi Ltd., a multinational engineering and manufacturing firm headquartered in Tokyo, Japan. GE is headquartered in Fairfield, Conn.
“Transparency and honesty are absolutely critical when dealing with issues relating to the design of a nuclear reactor,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “The Department of Justice will protect federal funds and the Nuclear Regulatory Commission’s crucial mandate of ensuring public safety.”



Government Sues Company Contracted to Move Belongings of Deployed Military

Based on allegations of fraud first raised in Augusta, the federal government has sued a company that specializes in moving the belongings of military men and women after two former employees said the business inflated relocation costs and overbilled the Department of Defense.

If the government should prevail at trial and win treble damages possible under the False Claims Act, a judgment could be worth billions of dollars in fines and penalties.

The lawsuit, filed in U.S. District Court in Columbia in April 2012, had been kept under seal until the U.S. Justice Department joined the case in December and filed an amended complaint against Covan World-Wide Moving Inc. and Coleman American Moving Services Inc.

Read rest of story here


Frozen Meal Delivery Company Illegally Billed Medicaid $900,000, Suit Says

KIMBERLY • Federal prosecutors say a local meal delivery service bilked Medicaid out of nearly $900,000.

Homestyle Direct, based in Kimberly, illegally billed Medicaid for $888,152, delivered meals to deceased clients, lied to clients about Medicaid requirements, and continued to deliver meals to clients who used Medicaid even when they were hospitalized, prosecutors say.

The company violated the False Claims Act and several state laws, says a lawsuit filed in federal civil court in Boise on Tuesday.

Homesyle Direct cooks menu items weekly in its kitchen, then flash-freezes them and packs them in dry ice for delivery and shipping. The meals are delivered to the elderly and homebound. Some are covered by Medicaid; some pay for the meals themselves.

Read rest of story here


Manhattan U.S. Attorney Files Healthcare Fraud Claims against Novartis Pharma & Settles Suit against BioScrip

U.S. Attorney’s Office Southern District of New York – News Release:

Suit Alleges Novartis Orchestrated a Kickback Scheme with Bioscrip, Inc., by Referring New Patients and Giving Rebates to BioScrip in Return for Bioscrip Increasing Refills of Exjade Prescriptions Through Biased Recommendations to Patients, Which Emphasized the Benefits of Refills While Understating Exjade’s Serious, Potentially Life-Threatening Side Effects

BioScrip Agrees to Pay $15 Million and Makes Extensive Factual Admissions to Resolve Claims

Preet Bharara, the United States Attorney for the Southern District of New York, and Ronald T. Hosko, the Assistant Director of the Federal Bureau of Investigation, Criminal Investigative Division (“FBI”), announced today that the United States has filed additional civil healthcare fraud claims in Manhattan federal court against NOVARTIS PHARMACEUTICALS CORP. (“NOVARTIS”) and BIOSCRIP, INC. (“BIOSCRIP”). The Government’s Amended Complaint seeks treble damages and civil penalties under the False Claims Act against NOVARTIS and BIOSCRIP for NOVARTIS providing kickbacks, in the form of patient referrals and in the guise of rebates, to BIOSCRIP in exchange for BIOSCRIP recommending refills to Exjade patients. The lawsuit alleges that, as a result of this kickback scheme, Medicare and Medicaid have paid tens of millions of dollars in reimbursements based on false, kickback-tainted claims for Exjade shipped by BIOSCRIP.

Simultaneous with the filing of the Amended Complaint, U.S. District Judge Colleen McMahon approved a settlement to resolve the United States’ claims against BIOSCRIP. Under that settlement, which takes into account BIOSCRIP’s limited financial resources, BIOSCRIP (i) agrees to pay $11,685,705.43 to the United States; (ii) admits numerous facts concerning its relationship with NOVARTIS; and (iii) agrees to cooperate with the United States in the prosecution of the claims against NOVARTIS. BIOSCRIP has also agreed in principle to pay $3.31 million to a group of States to settle the States’ claims based on the same alleged conduct.

Manhattan U.S. Attorney Preet Bharara said: “As alleged, Novartis is caught having orchestrated yet another scheme whereby it used the lure of kickbacks to co-opt a healthcare providers’ independence and, in this case, turned pharmacy employees at BioScrip into salespeople for Exjade. By allegedly having BioScrip promote refills under the guise of purported ‘counseling’ and ‘education,’ Novartis caused patients to receive one-sided advice that did not discuss Exjade’s serious, potentially life-threatening, side effects. Further, by hiding this illegal quid pro quo from federal healthcare programs, Novartis caused the public to pay tens of millions of dollars for kickback-tainted drugs.”

FBI Assistant Director Ronald T. Hosko said: “Investigations such as these are a high priority for the FBI and we will aggressively pursue providers that boost their profits at the expense of Medicare and other government programs. Due to the potential impact to the nation’s health care system and to the public from these types of multifaceted schemes, we have created a centralized team to provide nationwide support to our field offices called the Major Provider Response Team. The FBI is committed to working with our partners in these types of investigations and appreciates the public’s involvement in the process.”

According to the allegations contained in the Amended Complaint filed today in Manhattan federal court:

NOVARTIS markets and manufactures Exjade, an iron chelation drug approved for use by patients who have iron overload resulting from blood transfusions. Between February 2007 and May 2012, NOVARTIS orchestrated a scheme whereby it offered kickbacks, in the form of patient referrals and under the guise of rebates, to BIOSCRIP, a specialty pharmacy, in exchange for BIOSCRIP increasing its Exjade refills through biased recommendations to patients.

BIOSCRIP was part of a Novartis-created exclusive distribution network for Exjade, and through this network, Novartis was able to refer Exjade patients to particular pharmacies within the network. In order to obtain greater numbers of patient referrals and rebates, BIOSCRIP, in coordination with NOVARTIS, implemented a program of calling patients to recommend Exjade refills or to get patients who stopped ordering Exjade refills to resume ordering them.

NOVARTIS and BIOSCRIP promoted these calls as part of an effort to offer clinical “counseling” or “education” to Exjade patients. In fact, however, the real purpose behind this call program was to obtain more refill orders so that Novartis could increase its Exjade sales and meet its national Exjade sales target and BIOSCRIP, in turn, could get more patient referrals and higher rebates. Thus, the BIOSCRIP employees making those calls to Exjade patients emphasized the importance of getting refills, but ignored Exjade’s serious, potentially life-threatening side effects, such as kidney failure and gastrointestinal hemorrhage. Indeed, according to a former BIOSCRIP supervisor, the incentives offered by NOVARTIS caused BIOSCRIP to focus exclusively on getting Exjade patients to order refills, rather than caring for these patients. This Exjade scheme violated the federal anti-kickback statute, which prohibits the offer or payment of remuneration to induce the purchase or recommendation of any drug or service covered by Medicare, Medicaid, or another federal healthcare program.

By orchestrating this scheme, NOVARTIS and BIOSCRIP further caused pharmacies to submit tens of thousands of claims to Medicare and Medicaid, resulting in those programs paying out tens of millions of dollars in reimbursements based on false claims tainted by kickbacks.

Further, as part of its settlement with the United States, BIOSCRIP made extensive factual admissions, including, among other things, that:

  • BIOSCRIP was one of three specialty pharmacies permitted to dispense Exjade as part of “EPASS,” NOVARTIS’s distribution network for Exjade.
  • NOVARTIS controlled how approximately half of the patient prescriptions received by EPASS were distributed among BIOSCRIP and the other two EPASS pharmacies.
  • In 2007, NOVARTIS informed BIOSCRIP that the level of refill orders among BioScrip’s Exjade patients was below the refill levels achieved by the other two EPASS pharmacies. NOVARTIS demanded that BIOSCRIP implement a Performance Improvement Plan (“PIP”) due to its low refill levels relative to the other EPASS pharmacies. NOVARTIS informed BIOSCRIP that it had to increase its refill levels or NOVARTIS would cut off the flow of certain patient referrals to BIOSCRIP and, potentially, remove BIOSCRIP from EPASS.
  • In response, and to avoid losing access to patient referrals, BIOSCRIP launched an intensive effort to (i) increase overall patient orders for Exjade refills, and (ii) “restart” many patients who had stopped ordering Exjade. To achieve that goal, BIOSCRIP hired a group of staff to work exclusively on Exjade (the “Exjade Team”). BIOSCRIP directed the Exjade Team to call many patients to encourage them to order refills and to encourage many patients who had stopped ordering refills to “restart” Exjade.
  • The efforts of the Exjade Team resulted in significant increases in Exjade refill levels at BIOSCRIP – by September 2007, the refill levels at BIOSCRIP were higher than at the other two EPASS pharmacies. Recognizing the improvement in refill levels at BIOSCRIP, NOVARTIS continued to direct patient referrals to BIOSCRIP.
  • BIOSCRIP developed a protocol, named ScripCare, for the Exjade Team to call patients to encourage many patients to order refills and to encourage many patients who had stopped ordering refills to restart Exjade. In developing ScripCare, BIOSCRIP shared key elements with NOVARTIS.
  • The Exjade marketing team at NOVARTIS provided input on aspects of the ScripCare protocol, including how to discuss potential side effects with Exjade patients.
  • In 2007, NOVARTIS began issuing monthly “Exjade Scorecards” to BIOSCRIP and the other two EPASS pharmacies that measured, among other things, “adherence” scores. Based on discussions with NOVARTIS, BIOSCRIP knew that the “adherence” scores in the Exjade Scorecards were designed to show how long Exjade patients continued to order refills. Later that year, NOVARTIS began discussions with BIOSCRIP about a plan to allocate more patient referrals to BIOSCRIP if, according to the adherence scores in the Exjade Scorecards, it remained the highest performer in terms of obtaining refill orders.
  • In 2008, BIOSCRIP agreed to a new patient allocation plan proposed by NOVARTIS, which linked the percentage of patient referrals for BIOSCRIP to its refill rates as measured by the Exjade Scorecard.
  • In 2011, BIOSCRIP was placed under a “corrective action” plan by NOVARTIS due to its low refill rates relative to the other EPASS pharmacies and other issues, and stopped receiving certain patient referrals. In response, BIOSCRIP launched an intensive effort to “restart” many patients and to encourage many patients to order refills. By late 2011, BIOSCRIP’s refill rates had increased significantly; and, starting in January 2012, NOVARTIS increased its allocation of patient referrals to BIOSCRIP based on its higher refill rates relative to the other EPASS pharmacies in late 2011.

* * *

The additional claims in the Amended Complaint seek treble damages and penalties under the False Claims Act for the tens of millions of dollars in reimbursements that Medicare and Medicaid paid for Exjade shipments that resulted from the kickback scheme involving NOVARTIS and BIOSCRIP. In addition, the Government seeks compensatory damages under the common law for the tens of millions of dollars for the profits that NOVARTIS and BIOSCRIP obtained as the result of Medicare and Medicaid reimbursements for Exjade.

The allegations of fraud stated in the Complaint were first brought to the attention of federal law enforcement by a whistle-blower who filed a lawsuit under the False Claims Act. The False Claims Act permits the Government to recover up to three times the amount of damages incurred by the United States, plus civil penalties ranging from $5,500 to $11,000 per violation. Private parties who have knowledge of fraud committed against the Government may file suit on behalf of the Government and share in any recovery. The United States may then intervene and file its own lawsuit for treble damages and penalties, as it did in this case.

Mr. Bharara praised the investigative work of the FBI’s Major Provider Response Team, HHS-OIG, and the Medicaid Fraud Control Units for New York, Washington, and Ohio. He also thanked the Commercial Litigation Branch of the U.S. Department of Justice’s Civil Division in Washington D.C., for its extraordinary assistance in this case.

The case is being handled by the Office’s Civil Frauds Unit. Mr. Bharara established the Civil Frauds Unit in March 2010 to bring renewed focus and additional resources to combating healthcare and other types of frauds. Assistant U.S. Attorneys Li Yu, Rebecca C. Martin, and Ellen M. London are in charge of the case.


80 From N.Y. Police and Fire Forces Are Charged in Social Security Fraud

Eighty retired New York City police officers and firefighters were charged on Tuesday in one of the largest Social Security disability frauds ever, a sprawling decades-long scheme in which false mental disability claims by as many as 1,000 people cost taxpayers hundreds of millions of dollars, according to court papers.

Scores of those charged in the case essentially stole in plain sight, according to a 205-count indictment and a bail letter, collecting between $30,000 and $50,000 a year based on fabricated claims that they were completely incapacitated by serious psychiatric disorders. Many said that their actions in response to the Sept. 11, 2001, terrorist attacks were responsible for their psychiatric conditions, such as post-traumatic stress disorder, anxiety or depression.

But their Facebook pages and other websites, according to the court papers, tell a starkly different story.

Read rest of story here


United States Recovered $3.8 Billion From FCA Cases in 2013

Firework 2

Photo: Larry Wiezycki, Polyphonic Image

Happy New Year from the qui tam team at James, Hoyer, Newcomer & Smiljanich!

We’re excited for a busy and productive 2014, and wish the same to our readers.  As we leave 2013 in the history books, we are pleased to note that it was a “banner year” for False Claims Act recoveries.  The Justice Department announced in December that it recovered $3.8 billion from settlements and judgments in False Claims Act cases in 2013, the second highest annual recovery in history.

Here’s to hoping that 2014 brings many more important victories and recoveries for the United States!

 Justice Department Recovers $3.8 Billion from False Claims Act Cases in Fiscal Year 2013

Department of Justice – Office of Public Affairs

The Justice Department secured $3. 8 billion in settlements and judgments from civil cases involving fraud against the government in the fiscal year ending Sept. 30, 2013, Assistant Attorney General for the Civil Division Stuart F. Delery announced today.   This dollar amount, which is the second largest annual recovery of its type in history, brings total recoveries under the False Claims Act since January 2009 to $ 17 billion – nearly half the total recoveries since the Act was amended 27 years ago in 1986.

The Justice Department’s fiscal year 2013 efforts recovered more than $3 billion for the fourth year in a row and are surpassed only by last year’s nearly $5 billion in recoveries.   As in previous years, the largest recoveries related to health care fraud, which reached $2. 6  billion.   Procurement fraud (related primarily to defense contracts) accounted for another $ 890  million – a record in that area.

“It has been another banner year for civil fraud recoveries, but more importantly, it has been a great year for the taxpayer and for the millions of Americans, state agencies and organizations that benefit from government programs and contracts,” said Assistant Attorney General Delery.   “The $3. 8 billion in federal False Claims Act recoveries in fiscal year 2013, plus another $443 million in recoveries for state Medicaid programs, restores scarce taxpayer dollars to federal and state governments.   The government’s success in these cases is also a strong deterrent to others who would misuse public funds, which means government programs designed to keep us safer, healthier and economically more prosperous can do so without the corrosive effects of fraud and false claims.”

The False Claims Act is the government’s primary civil remedy to redress false claims for government funds and property under government contracts, including national security and defense contracts, as well as under government programs as varied as Medicare, veterans benefits, federally insured loans and mortgages, transportation and research grants, agricultural supports, school lunches and disaster assistance.   In 1986, Congress strengthened the Act by amending it to increase incentives for whistleblowers to file lawsuits on behalf of the government, which has led to more investigations and greater recoveries.

Most false claims actions are filed under the Act’s whistleblower, or qui tam, provisions, which allow private citizens to file lawsuits alleging false claims on behalf of the government.  If the government prevails in the action, the whistleblower, known as a relator, receives up to 30 perc ent of the recovery.   The number of qui tam suits filed in fiscal year 2013 soared to 752 –100 more than the record set the previous fiscal year.   Recoveries in qui tam cases during fiscal year 2013 totaled $2. 9 billion , with whistleblowers recovering $345 million.

Health Care Fraud

The $2. 6 billion in health care fraud recoveries in fiscal year 2013 marks four straight years the department has recovered more than $2 billion in cases involving health care fraud.   This steady, significant and continuing success can be attributed to the high priority the Obama Administration has placed on fighting health care fraud.   In 2009, Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius announced the creation of an interagency task force, the Health Care Fraud Prevention and Enforcement Action Team (HEAT), to increase coordination and optimize criminal and civil enforcement.   This coordination has yielded historic results:   From January 2009 through the end of the 2013 fiscal year, the department used the False Claims Act to recover $12 .1 billion in federal health care dollars.   Most of these recoveries relate to fraud against Medicare and Medicaid.   Additional information on the government’s efforts in this area is available at, a webpage jointly established by the Departments of Justice and Health and Human Services.

Some of the largest recoveries this past fiscal year involved allegations of fraud and false claims in the pharmaceutical and medical device industries.   Of the $2. 6 billion in federal health care fraud recoveries, $1.8 billion were from alleged false claims for drugs and medical devices under federally insured health programs that, in addition to Medicare and Medicaid, include TRICARE, which provides benefits for military personnel and their families, veterans’ health care programs and the Federal Employees Health Benefits Program.   The department recovered an additional $443 million for state Medicaid programs.

Many of these settlements involved allegations that pharmaceutical manufacturers improperly promoted their drugs for uses not approved by the Food and Drug Administration (FDA) – a practice known as “off-label marketing.”   For example, drug manufacturer Abbott Laboratories Inc. paid $1.5 billion to resolve allegations that it illegally promoted the drug Depakote to treat agitation and aggression in elderly dementia patients and schizophrenia when neither of these uses was approved as safe and effective by the FDA.   This landmark $1.5 billion settlement included $575 million in federal civil recoveries, $225 million in state civil recoveries and nearly $700 million in criminal fines and forfeitures.   In another major pharmaceutical case, biotech giant Amgen Inc. paid the government $762 million, including $598.5 million in False Claims Act recoveries, to settle allegations that included its illegal promotion of Aranesp, a drug used to treat anemia, in doses not approved by the FDA and for off-label use to treat non-anemia-related conditions.  For details, see Abbott, Abbott sentencing, and Amgen.

The department also settled allegations relating to the manufacture and distribution of adulterated drugs.   For example, generic drug manufacturer Ranbaxy USA Inc. paid $505 million to settle allegations of false claims to federal and state health care programs for adulterated drugs distributed from its facilities in India.  The settlement included $237 million in federal civil claims, $118 million in state civil claims and $150 million in criminal fines and forfeitures.   For details, see Ranbaxy.

Adding to its successes under the False Claims Act, the Civil Division’s Consumer Protection Branch, together with U.S. Attorneys across the country, obtained 16 criminal convictions and more than $1. 3 billion in criminal fines, forfeitures and disgorgement under the Federal Food, Drug and Cosmetic Act (FDCA).  The FDCA protects the health and safety of the public by ensuring, among other things, that drugs intended for use in humans are safe and effective for their intended uses and that the labeling of such drugs bears true, complete and accurate information.

In other areas of health care fraud, the department obtained a $237 million judgment against South Carolina-based Tuomey Healthcare System Inc., after a four-week trial, for violating the Stark Law and the False Claims Act.  The Stark Law prohibits hospitals from submitting claims to Medicare for patients referred to the hospital by physicians who have a prohibited financial relationship with the hospital.   Tuomey’s appeal of the $237 million judgment is pending.  If the judgment is affirmed on appeal, this will be the largest judgment in the history of the Stark Law.   For the court’s opinion, see Tuomey.

The department also recovered $26.3 million in a settlement with Steven J. Wasserman M.D., a dermatologist practicing in Florida, to resolve allegations that he entered into an illegal kickback arrangement with Tampa Pathology Laboratory that resulted in increased claims to Medicare.   Tampa Pathology Laboratory previously paid the government $950,000 for its role in the alleged scheme.   The $26.3 million settlement is one of the largest with an individual in the history of the False Claims Act.   For details, see Wasserman.

Procurement Fraud

Fiscal year 2013 was a record year for procurement fraud matters.   The department secured more than $887 million in settlements and judgments based on allegations of false claims and corruption involving government contracts.  Prominent among these successes was the department’s $664 million judgment against Connecticut-based defense contractor United Technologies Corp. (UTC).   A federal court found UTC liable for making false statements to the Air Force in negotiating the price of a contract for fighter jet engines.   In 2004, the department had won a smaller judgment after a three-month trial.  Both sides appealed, but the government’s arguments prevailed, resulting in the case being returned to the trial court to reassess damages.  The $664 million judgment, which UTC has appealed, is the largest judgment in the history of the False Claims Act and, if the appellate court affirms, will be the largest procurement recovery in history.   For details, see UTC.

The department also settled allegations of false claims with two companies in connection with their contracts with the General Services Administration (GSA) to market their products through the Multiple Award Schedule (MAS) program.   To be awarded a MAS contract, and thereby gain access to the broad government marketplace, contractors must provide GSA with complete, accurate and current information about their commercial sales practices, including discounts afforded to their commercial customers.   The government alleged that W.W. Grainger Inc., a national hardware distributor headquartered in Illinois, and Ohio-based RPM International Inc. and its subsidiary, Tremco Inc., a roofing supplies and services firm, failed to disclose discounts given to their commercial customers, which resulted in government customers paying higher prices.  The department recovered $70 million from W.W. Grainger in a settlement that also included allegations relating to a U.S. Postal Services contract and $61 million from RPM International Inc. and Tremco.  For details, see Grainger, RPM/Tremco.

Other Fraud Recoveries

A $45 million settlement with Japan-based Toyo Ink S.C. Holdings Co. Ltd. and its Japanese and United States affiliates (collectively Toyo) demonstrates the breadth of cases the department pursues.  This settlement resolved allegations that Toyo misrepresented the country of origin on documents presented to the Department of Homeland Security’s U.S. Customs and Border Protection to evade antidumping and countervailing duties on imports of the colorant carbazole violet pigment into the United States.   These duties protect U.S. businesses by offsetting unfair foreign pricing and foreign government subsidies.   For details, see Toyo.

The False Claims Act also is used to redress grant fraud.   In a significant case involving a grant from the Department of Education, Education Holdings Inc. (formerly The Princeton Review Inc.) paid $10 million to resolve allegations that the company fabricated attendance records for thousands of hours of afterschool tutoring of students that was funded by the federal grant.  For details, see Education Holdings.

Recoveries in Whistleblower Suits

Of the $3. 8 billion the department recovered in fiscal year 2013, $2. 9 billion related to lawsuits filed under the qui tam provisions of the False Claims Act.   During the same period, the department paid out more than $345 million to the courageous individuals who exposed fraud and false claims by filing a qui tam complaint.   (The average share paid to whistleblowers in fiscal year 2013 cannot be determined from these numbers because the awards paid to whistleblowers in one fiscal year do not always coincide with the fiscal year in which the case was resolved, and the fiscal year’s recoveries may include amounts to settle allegations outside the whistleblower’s complaint.)

Whistleblower lawsuits were in the range of three to four hundred per year from 2000 to 2009, when they began their climb from 433 lawsuits in fiscal year 2009 to 752  lawsuits in fiscal year 2013.   Due to the complexity of fraud investigations generally, the outcomes of many of the qui tam cases filed this past fiscal year are not yet known, but the growing number of lawsuits filed since 2009 have led to increased recoveries.   Qui tam recoveries exceeded $2 billion for the first time in fiscal year 2010 and have continued to exceed that amount every year since.   Qui tam recoveries this past fiscal year bring the department’s totals since January 2009 to $13.4 billion.   During the same period, the department paid out $1.98 billion in whistleblower awards.

“These recoveries would not have been possible without the brave contributions made by ordinary men and women who made extraordinary sacrifices to expose fraud and corruption in government programs,” said Assistant Attorney General Delery.   “We are also grateful to Congress and its continued support of strengthening the False Claims Act, including its qui tam provisions, giving the department the tools necessary to pursue false claims.”

In 1986, Senator Charles Grassley and Representative Howard Berman led successful efforts in Congress to amend the False Claims Act to, among other things, encourage whistleblowers to come forward with allegations of fraud.  In 2009, Senator Patrick J. Leahy, along with Senator Grassley and Representative Berman, championed the Fraud Enforcement and Recovery Act of 2009, which made additional improvements to the False Claims Act and other fraud statutes.   And in 2010, the passage of the Affordable Care Act provided additional inducements and protections for whistleblowers and strengthened the provisions of the federal health care Anti-Kickback Statute.

Assistant Attorney General Delery also expressed his deep appreciation for the dedicated public servants who investigated and pursued these cases.   These individuals include attorneys, investigators, auditors and other agency personnel throughout the Justice Department’s Civil Division, the U.S. Attorneys’ Offices, the Departments of Defense and Health and Human Services, the various Offices of Inspector General and the many other federal and state agencies that contributed to the department’s recoveries this past fiscal year.

“The department’s continued success in recovering fraudulent claims for taxpayer money this past fiscal year is a product of the tremendous skill and dedication of the people who worked on these cases and investigations and continue to work hard to protect against the misuse of taxpayer dollars,” said Delery.


Colorado Health Care Organization and One of ItsSt. James Healthcare, a Montana Hospital, to Pay $3.85 Million for Allegedly Providing Financial Benefits to Referring Physicians & Physician Groups

St. James Healthcare (St. James), a hospital located in Butte, Mont., and its parent company, Sisters of Charity of Leavenworth Health System (Sisters of Charity), a health care organization based in Denver, Colo., have agreed to pay $3.85 million to resolve allegations that they violated the Anti-Kickback Statute, the Stark Law and the False Claims Act by improperly providing financial benefits to physicians and physician groups that made referrals to the hospital, the Justice Department announced today.

The Anti-Kickback Statute prohibits the provision of remuneration with the intent to induce referrals of government health care program business.  The Stark Law restricts financial relationships that hospitals may enter into with physicians who refer patients to them.  Federal law prohibits payment by federal health care programs of medical claims that result from arrangements that violate the Anti-Kickback Statute or the Stark Law.

“Improper financial arrangements between hospitals and physicians not only undermine the integrity of the decisions that doctors make, they raise the cost of health care for all of us,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery.  “The department has longstanding concerns about such conduct and is committed to working with health care providers that come forward to disclose their misconduct.”

Read rest of story here