Archive for May, 2016

False Claims Act penalties are going up and Vermont is looking back

Whistleblower Award

Whistleblower AwardEarlier this month the Railroad Retirement Board announced in the May 2nd Federal Register that the statutory penalties associated with False Claims Act cases would be going way up.  The underlying legislation spurring the increase is the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015.

Pursuant to the Act, the new, post-adjustment minimum penalty for a False Claims Act violation is $10,781.40, which is the result of multiplying the current minimum penalty of $5,000 by 2.15628 and the new, post-adjustment maximum penalty is $21,562.80, which is the result of multiplying the current maximum penalty of $10,000 by the same 2.15628.

These large increases will be adjusted annually in January so each year, the cost of violating the False Claims Act could go up. The initial increases become effective for claims that are made on or after August 1, 2016.

VermontUnfortunately, the increases aren’t retroactive. However, on that topic, the Vermont False Claims Act just became retroactive via legislative inaction. Vermont’s False Claims Act was put into effect a little more than a year ago and it included a provision that it would not be retroactive until March 15, 2016, at which point the statute would be deemed to have retroactive application absent a legislative amendment to the contrary.

Well, no legislative action was undertaken so now the Vermont False Claims Act found at 32 V.S.A. § 639 can look back to cover false claims during applicable limitations provisions under Vermont law.

Both of these developments are good news for taxpayers who can now protect a greater taxpayer demographic and potentially recover much larger penalties from entities that are being paid by the government as a result of false claims.

Feel free to contact us if you have any questions.


James Hoyer Partner Interviewed on For-Profit College Problems

James Hoyer Partner Jesse Hoyer interviewed by ABC Action News

James Hoyer partner Jesse Hoyer interviewed by ABC Action News

James Hoyer partner Jesse Hoyer is an expert on for-profit college whistleblower cases having handled several over the past several years, including False Claims Act cases against EDMCCorinthian Colleges, and Ed4Mil.

ABC Action News in Tampa talked with Hoyer for a follow-up report on the sale of Corinthian Colleges to a debt collection company.  The report exposed that many of the same old problems still exist at former Corinthian schools, like Everest College, even with the new owner.

Click here to watch the investigative report or read the story by ABC Action News reporter Adam Walser.

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Federal Government Joins Prime Healthcare Whistleblower Suit


Prime Healthcare Whistleblower Karin Berntsen

The federal government is joining the whistleblower case of James Hoyer client Karin Berntsen against Prime Healthcare Services, its founder Dr. Prem Reddy, and more than a dozen of its hospitals.  Prime is a fast growing company that owns more than 40 hospitals nationwide.

The whistleblower suit, which was unsealed in December of 2013, alleges Prime improperly admitted patients through its emergency rooms to increase payments from Medicare.

James Hoyer partner Elaine Stromgren called the government’s intervention “a significant development which shows the seriousness of the allegations and the strength of the evidence supporting those claims.”

The Department of Justice news release explains some of the key allegations:

The lawsuit alleges that Dr. Reddy directed the corporate practice of pressuring Prime’s Emergency Department physicians and hospital administrators to raise inpatient admission rates, regardless of whether it was medically necessary to admit the patients.  The lawsuit alleges that Prime’s corporate officers, at Reddy’s direction, exerted immense pressure on doctors in the Emergency Departments to admit patients who could have been placed in observation, treated as outpatients or discharged.  As a result of these medically unnecessary admissions from the Emergency Departments, Prime hospitals allegedly submitted false claims to federal health care programs, such as Medicare.

Whistleblower Karin Berntsen remains in her position at Alvarado Hospital in San Diego as Director of Performance Improvement.  She came forward to expose these practices because she believes they put  patients at risk in order to increase profit.

DOJ says the government’s intervention in this case shows its emphasis on combating health care fraud:

“The Department of Justice is committed to ensuring that health care providers do not inappropriately seek to profit at the expense of federal health care programs,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “Schemes such as this one can contribute significantly to the rising cost of health care delivery and create needless patient risk.”

“Fraudulent billing practices, such as those alleged in this civil lawsuit, harm taxpayers who fund health care programs, such as Medicare,” said U.S. Attorney Eileen M. Decker for the Central District of California.  “The Justice Department works collaboratively with law enforcement agencies, regulators and, in some cases, private citizens to ensure the integrity of a system that provides healthcare to millions of Americans.”

“Charging for medically unnecessary services, as alleged in this case, raises costs in government health programs and remorselessly passes that bill along to taxpayers,” said Special Agent in Charge Christian J. Schrank of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG).  “Our investigation into the allegations in this case, along with our law enforcement partners, led to the government’s decision to intervene.”

Contact Us ButtonThe whistleblower suit also alleges that Prime would “upcode” patient diagnoses to make them appear more serious, in order to get additional Medicare payments.  The James Hoyer firm will continue to vigorously pursue this count as well.

Multiple news outlets reported on the significant development, including the Center for Investigative Reporting, Wall Street Journal, Los Angeles Times, San Diego Union TribuneModern Healthcare, and Becker’s Hospital Review, among others.


Alabama Attorney General pushes for an Alabama False Claims Act

Alabama Attorney General Luther Strange

Alabama Attorney General Luther Strange

Late last month, Alabama Attorney General Luther Strange urged Alabama lawmakers to establish a False Claims Act for the state in order to increase the funds available for medical services for Alabama’s most needy citizens.
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