Posts Tagged ‘False Claim’

Endo Pharma Faces Suit for Opioid False Claims

TN Attorney General sues opioid maker Endo Pharmaceuticals (photo courtesy Times News)

Endo Pharmaceuticals, the same company which was at the center of a $193 million settlement with one of James Hoyer’s whistleblower clients, is now facing another major legal battle. The Tennessee Attorney General is suing Endo for making unlawful and false claims about the safety and benefits of its opioid products.

The AG’s office says Endo violated the Tennessee Consumer Protection Act and contributed to a devastating health crisis in Tennessee. Here are details from the news release by Attorney General Herbert Slatery’s office:

Attorney General Herbert H. Slatery III today sued Endo Pharmaceuticals and Endo Health Solutions Inc. (Endo) for making unlawful and false claims about the safety and benefits of its opioid products.

The State’s lawsuit, filed in Knoxville, alleges Endo violated the Tennessee Consumer Protection Act and contributed to a devastating public health crisis in Tennessee.

“Our Office has conducted an extensive investigation into Endo’s unlawful marketing practices which included targeting vulnerable populations like the elderly,” said Tennessee Attorney General Herbert H. Slatery III. “Endo has repeatedly refused to take responsibility for its unconscionable conduct, which is why we are taking this action.”

The allegations in the State’s 180-page complaint detail how Endo deceptively marketed its opioid products as being less addictive and more effective than others on the market. It did this despite evidence to the contrary, including the FDA’s explicit rejection of Endo’s claim that Opana ER was resistant to abuse as well as overwhelming evidence that Opana ER was being abused throughout Tennessee.

The Complaint alleges that Endo also knew the dangers of its opioid products, including increased risks of respiratory depression and death in elderly patients, and failed to clearly disclose those risks while it specifically targeted patients in that age group.

The State also has reason to believe Endo used the recommendations and educational materials of third-party groups like the American Pain Foundation without disclosing that Endo was by far the biggest donor to the Foundation and provided more than half of its total funding. Endo provided significant funding to other third-party groups and subsequently relied on material generated by those groups without disclosing the financial relationship.

The Attorney General requested the complaint be filed under a temporary seal because Endo claims the information produced during the State’s investigation is confidential. The order sealed by the judge allows the seal to expire in 10 days unless Endo acts to extend it.

The Attorney General believes the complaint should be made available to the public in its entirety and efforts to keep it confidential will only prolong and diminish Endo’s accountability for its conduct.


Adventist Health Pays $118 Million to Settle Whistleblower Case

The Department of Justice announced one of the largest False Claims Act settlements ever over Stark Statute violations, related to improper compensation to doctors for referrals.  Adventist Health System has agreed to pay more than $118 million to settle allegations from multiple whistleblowers.  The U.S. government will receive $115 million and $3.75 million will go to the states of Florida, North Carolina, Tennessee and Texas.  Here is the DOJ news release:

Adventist Health System Agrees to Pay $115 Million to Settle False Claims Act Allegations

Adventist Health System has agreed to pay the United States $115 million to settle allegations that it violated the False Claims Act by maintaining improper compensation arrangements with referring physicians and by miscoding claims, the Justice Department announced today.  Adventist is a non-profit healthcare organization that operates hospitals and other health care facilities in 10 states.

“Unlawful financial arrangements between heath care providers and their referral sources raise concerns about physician independence and objectivity,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “Patients are entitled to be sure that the care they receive is based on their actual medical needs rather than the financial interests of their physician.”

The settlement announced today resolves allegations that Adventist submitted false claims to the Medicare and Medicaid programs for services rendered to patients referred by employed physicians who received bonuses based on a formula that improperly took into account the value of the physicians’ referrals to Adventist hospitals.  Federal law restricts the financial relationships that hospitals and clinics may have with doctors who refer patients to them.

“Adventist-owned hospitals, such as Park Ridge, allegedly paid doctors’ bonuses based on the number of test and procedures they ordered,” said Acting U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina.  “This type of financial incentive is not only prohibited by law, but can undermine patients’ medical care.  Would-be violators should take notice that my office will use the False Claims Act to prevent and pursue health care providers that threaten the integrity of our healthcare system and waste taxpayer dollars.”

“Companies that financially reward physicians in exchange for patient referrals – as the government contended in this case – undermine the physicians’ impartial medical judgment at the expense of patients and taxpayers,” said Special Agent in Charge Derrick L. Jackson of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) in Atlanta.  “We will continue to investigate such wasteful business arrangements.”

The settlement also resolves allegations that Adventist submitted bills to Medicare for its employed physicians’ professional services containing certain improper coding modifiers, and thereby obtained greater reimbursement for these services than entitled.

The allegations settled today arose from two lawsuits filed respectively by whistleblowers Michael Payne, Melissa Church and Gloria Pryor, who worked at Adventist’s hospital in Hendersonville, North Carolina, and Sherry Dorsey, who worked at Adventist’s corporate office, under the qui tam provisions of the False Claims Act.  The act permits private parties to file suit on behalf of the United States for false claims, and to share in any recovery.  The whistleblowers’ share of the settlement has not yet been determined.

This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $25 billion through False Claims Act cases, with more than $16 billion of that amount recovered in cases involving fraud against federal health care programs.

The cases, United States ex rel. Payne, et al. v. Adventist Health System/Sunbelt, Inc., et al. No. 12-856 (W.D.N.C), and United States ex rel. Dorsey v. Adventist Health System Sunbelt Healthcare Corp., et al., No. 13-217 (W.D.N.C), were handled by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office of the Western District of North Carolina and HHS-OIG.  The claims settled by this agreement are allegations only, and there has been no determination of liability.


False Claims Case Against Adventist Health System Clears Major Hurdle

The whistle-blower case against Adventist Health System/Sunbelt, Inc. got the go ahead to move forward on claims that the hospital owner fraudulently over-billed Medicare, Medicaid and Tricare for emergency department services.  A federal judge in Florida refused to toss out claims by two former employees, denying the company’s Motion to Dismiss.

The James Hoyer Law Firm serves as co-counsel in the case representing the whistle-blowers along with lead attorney Marlan Wilbanks.

Law360’s Daniel Wilson reports on the decision in this article:  “Adventist Health Can’t Dodge FCA Claim of ER Overbilling.”

Law360, New York (February 20, 2013, 12:17 PM ET) — A Florida federal judge on Tuesday refused  to toss two former workers’ claim that hospital owner Adventist Health System/Sunbelt Inc. had  fraudulently overbilled Medicare, Medicaid and Tricare for emergency department services, ruling  the plaintiffs had adequately backed the claim.

According to U.S. District Judge John Antoon II, relator Amanda Dittmann — a former bill-coding  and reimbursement compliance officer at the company — was in a position to have personally observed AHS’ allegedly unlawful emergency billing practices, meaning the relators had shown the necessary firsthand knowledge of the company’s claimed wrongdoing.

“The relators’ allegations ‘provide the indicia of reliability that is necessary in a complaint alleging a fraudulent billing scheme,’” Judge Antoon said.

The order marks Judge Antoon’s second refusal to toss claims from the False Claims Act suit, following his July order on two other overbilling claims, which also found that the relators — Dittman and doctor Charlotte Elenberger — had adequately based those claims on personal knowledge of AHS’ alleged overbilling. The relators added their emergency department overbilling claim in an October amended complaint.

Marlan Wilbanks, counsel for the relators, said Thursday that the ruling was “very important,” backing — along with Judge Antoon’s previous order — their allegations of a lack of institutional control at AHS.

“The consistent theme [behind the orders] was that when it came to government billing, they were asleep at the switch,” Wilbanks said. “We’ll be showing that there’s not hundreds, but thousands of  false claims.”

Counsel for AHS did not immediately respond to a request for comment.

The suit, first brought in July 2010 by Dittmann and Elenberger, who formerly had staff privileges at AHS’ Orlando, Fla.-based Florida Hospital, accuses the Altamonte Springs, Fla.-based nonprofit health care organization of improperly overcharging Medicare, Medicaid and Tricare for services at the hospital. The case was unsealed in October 2011 after the U.S. declined to intervene.

AHS had routinely misused billing code modifiers to unbundle payments for bundled medical services, charging the government more than the bundled price, according to the complaint.

The health care group had also misused a pricing code for the drug octreotide, charging for a more expensive, higher dosage strength version than actually used, resulting in several hundred thousand dollars in government overcharges between August 2007 and July 2008 alone, the relators allege. While the company had discovered these overcharges through an internal audit, it had made no attempt to reimburse the government or extend the audit, the relators claim.

AHS had also routinely billed the federal government for computer-aided detection software analysis of mammograms, even when no such analysis was done, the complaint said. When a third-party radiology laboratory learned it had received improper reimbursement for CAD analysis supposedly performed on behalf of AHS, it promptly refunded insurers and the government, but AHS refused to reimburse the government for fear a refund would trigger an audit, according to the relators.

The relators are represented by Elaine Stromgren, Christopher C. Casper and John Newcomer of James Hoyer Newcomer & Smiljanich PA; Marlan B. Wilbanks and Ty M. Bridges of Wilbanks & Bridges LLP; Matthew P. McLauchlin of Volpe Bajalia Wickes Rogerson & Wachs PA; and L. Lin Wood, Amy M. Stewart and Katherine V. Hernacki of Wood Hernacki and Evans LLC.