Posts Tagged ‘settlement’

Rare Case of Patient Whistleblower leads to Successful Settlement

AgeVital agrees to pay $775,000 to settle kickback claims

[*See video below on coverage of the settlement on WFLA channel 8 in Tampa. James Hoyer Attorney Jesse Hoyer is interviewed*]

SARASOTA, FL – The action of one patient who recognized possible fraud against Medicare led to this settlement which returns nearly one million dollars to taxpayers.  Vital Life Institute LLC, known as AgeVital Pharmacy LLC, along with owners Jenny and William Wilkins, have agreed to pay at least $775,000 to resolve claims that they violated the False Claims Act by engaging in an illegal kickback scheme.

“The importance of this settlement goes far beyond the amount recovered. It demonstrates the value and impact of everyday citizens who come forward to expose fraud,” said attorney Jesse Hoyer, local counsel for the whistleblower case. “Medicare, Medicaid and Tricare beneficiaries who carefully review their Explanation of Benefits statements can make a difference.”

The settlement resolves allegations that Sarasota-based AgeVital paid kickbacks to a third-party marketing company to solicit patients for compounded drug prescriptions, regardless of patient need. The marketing company allegedly arranged for prescribers to sign those prescriptions, which were then referred to AgeVital to be filled in exchange for a substantial share of Tricare and Medicare reimbursements.

Details of case

The case was filed in federal court in Tampa in 2015, after Manfred Knopf, a patient in New Jersey who received prescriptions he did not need or want, recognized that Medicare was billed for the products. AgeVital solicited Mr. Knopf to purchase the expensive compounded pharmaceuticals after he suffered a slip and fall accident that required treatment for his injuries.

Despite never agreeing to receive these medications, AgeVital began sending containers of expensive compounding creams to his doorstep. The healthcare prescriber listed on the packages delivered was Dr. Jean Wilson, a provider Knopf had never heard of or been treated by. Medicare paid approximately $37,377 for these medically unnecessary compounded pharmaceuticals sent to Knopf. After recognizing what he believed was fraud, Knopf decided to report his concerns to the government.

With the assistance of attorney David Williams of Kline & Specter, P.C. (along with Jesse Hoyer and Elaine Stromgren of James Hoyer, P.A.), the lawsuit was filed under the qui tam or whistleblower provisions of the False Claims Act. The Act allows private citizens who suspect

fraud against the government to bring a lawsuit on behalf of the United States for false claims and to share in any recovery. 

“The False Claims Act gives us a powerful tool with which to expose fraud and recover money on behalf of taxpayers. We thank Mr. Knopf for recognizing the fraud and having the courage to bring it to the Government’s attention,” said attorney Hoyer.

Anti-Kickback Statute

The Anti-Kickback Statute prohibits the knowing and willful payment of compensation to induce the referral of services or items that are paid for by a federal health care program. Individuals and entities can be subject to liability under the False Claims Act for submitting claims to federal health care programs in violation of the Anti-Kickback Statute.

“Kickback schemes undermine public trust in our health care system and lead to unnecessary health care costs at taxpayers’ expense,” said Assistant Attorney General Jody Hunt for the Department of Justice’s Civil Division.

“We will not tolerate those who profit at the expense of taxpayers by entering into illegal kickback arrangements,” says U.S. Attorney for the Middle District of Florida Maria Chapa Lopez. “Our office is committed to holding individuals accountable for corporate malfeasance.”

Mr. Williams, Ms. Hoyer and Ms. Stromgren sincerely appreciate the efforts of the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the Middle District of Florida, the FBI, the Defense Criminal Investigative Service and the U.S. Department of Health and Human Services Office of Inspector General that contributed to the resolution of this case.

Kline & Specter P.C. is a nationwide personal injury and medical malpractice law firm with offices in Pennsylvania, New Jersey, Delaware, and New York.

James Hoyer, P.A. is a nationwide whistleblower and employment law firm with offices in Florida, Washington D.C., and Michigan.


Military Contractor PTP Settles Whistleblower Case

James Hoyer Partner Jillian Estes interviewed by ABC Action News

James Hoyer Partner Jillian Estes interviewed by ABC Action News about the PTP whistleblower case settlement

People Technology & Processes, LLC (“PTP”), a defense contractor based in Lakeland, Florida, agreed to settle a whistleblower case in which the company was accused of billing for work never performed for the U.S. Army in Afghanistan, the James Hoyer law firm announced today.  The company was also accused of falsifying records to cover up the fraud.  PTP paid the U.S. government $320,000 to resolve the allegations of improper billing and fraud.

Click here to watch the ABC Action News story on the whistleblower case by Investigative Reporter Adam Walser .

Improper Billing & Cover up

The allegations were exposed in a whistleblower lawsuit filed by former PTP employee Aidan Tamer Toprakci, a James Hoyer client.  Toprakci is a billing and accounting software specialist for PTP and discovered multiple billing discrepancies and efforts to cover them up. He resigned from the company in November of 2012, after efforts to get PTP to address the problem were rebuffed.  In 2013, Toprakci filed suit under the False Claims Act, which allows private citizens to act on behalf of taxpayers when they discover fraud against the government.

“I was auditing the records to make sure billings were done correctly, when I discovered they were billing for an employee who had been fired,” Toprakci said.  “I brought it to their attention, but they were not interested in correcting the problem. They started retaliating against me for raising the issue. It upset me greatly that I believed the U.S. Army was being ripped off, and I did not want to be a part of that.”

PTP- ABC Aidan intv

James Hoyer Client Adain Toprakci interviewed via FaceTime by ABC Action News

The government’s investigation after Toprakci filed suit confirmed that PTP was not only billing for an employee who had been fired, but also for an employee who was on vacation for a month and others even before they started working for the company.  Toprakci also provided evidence that the Defendants falsified records to cover up the fraudulent conduct.

The Defendants

PTP was a U.S. Army subcontractor for ManTech International, one of the prime U.S. contractors providing services in Afghanistan.  PTP billed ManTech for false hours, which U.S. taxpayers ultimately paid for.

Victor Buonamia is the President and CEO of PTP, and Nicole Buonamia, his daughter, is the CFO. The improper invoices submitted by PTP from November of 2011 through June of 2012,   were signed by Victor Buonamia, Nicole Buonamia, or both.

Stiff Penalty Sends Message

PTP was required to pay two-and-a-half times damages in this case, a penalty rarely sought by the government and an indication of the severity of the allegations.

“The level of disregard and abuse of taxpayer money is astonishing here,” said James Hoyer partner Jillian Estes who represents Toprakci. “It was very important for the government to seek the most severe damages to send a message that this behavior will not be tolerated by government contractors and subcontractors.”

“All contractors and subcontractors, who are ultimately paid with American taxpayer dollars, will be held accountable for submitting fraudulent claims to the Government,” said Special Agent in Charge of Defense Criminal Investigative Services, Southeast Field Office, John F. Khin, in a news release by the U.S. Department of Justice.

Past Problems with PTP

This is not the first time PTP has had a problem with performance.  In a suit with primary contractor SAIC, the company was chided for putting troops in danger in Afghanistan. According to the lawsuit between SAIC and PTP:

On August 28, 2013, the Army and several Defendants personnel had a meeting, during which the Army stated it was ‘fed up’ with PTP’s poor performance, lack of management, hostile work environment with a pattern of EEO violations/racial discriminations, and practices which endangered the lives of military personnel.

“This company was not only endangering the lives of soldiers, but also stealing money intended to keep them safe.  It’s a pattern of bad behavior that has to stop,” said attorney Estes.

The False Claims Act

The False Claims Act is the government’s most successful tool in fighting fraud.  In 2016 alone, the Justice Department recovered more than $4.7 billion from False Claims Act cases, the 3rd highest annual recovery in FCA history.  It would not be possible without brave whistleblowers like Aidan Toprakci, a native of Turkey who became a United States citizen in 2016.

“Like so many other courageous whistleblowers, Aidan put his livelihood on the line to come forward and expose fraud on behalf of American taxpayers,” said Estes.

“I am grateful to this country, and I want to give back for the many opportunities I have received here.  I am proud that my efforts returned money to U.S. taxpayers,” Toprakci said.

As an incentive to come forward to expose fraud against the government, whistleblowers receive a percentage of the money recovered as a reward.  In this case, Toprakci received 20% of the government’s recovery as a reward for his efforts.

Click here to read a news story on the settlement in the Lakeland Ledger.


Children’s Hospital to Pay $12.9 Million to Settle False Claims Act Allegations

The United States Department of Justice released this statement in regards to the settlement:

Children’s Hospital, Children’s National Medical Center Inc. and its affiliated entities (collectively CNMC) have agreed to pay $12.9 million to resolve allegations that they violated the False Claims Act by submitting false cost reports and other applications to the components and contractors of the Department of Health and Human Services (HHS), as well as to Virginia and District of Columbia Medicaid programs, the Department of Justice announced today.  CNMC is based in Washington, D.C., and provides pediatric care throughout the metropolitan region.

“The false reporting alleged in today’s settlement deprived the Medicare Trust Fund of millions of taxpayers’ dollars,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division.  “Such conduct wastes critical federal health care program funds and drives up the costs of health care for all of us.”

“The integrity of federal health care programs depends on honest and accurate reporting from the hospitals and other health care providers that receive hundreds of billions of tax dollars every year,” said Acting U.S. Attorney Vincent H. Cohen Jr. of the District of Columbia.  “This settlement demonstrates our commitment to defending the integrity of the system and ensuring that taxpayer money goes to meet the most critical health care needs.  We will continue to work with whistleblowers like the former employee who came forward in this case to battle waste, fraud and abuse that fuel the skyrocketing cost of health care.”

According to the settlement agreement, CNMC misstated information on cost reports and applications in two distinct manners to HHS.  This false information was used by HHS and Medicaid programs to calculate reimbursement rates to CNMC.  The United States contended that CNMC misreported its available bed count on its application to HHS’ Health Resources and Services Administration under the Children’s Hospitals Graduate Medical Education (CHGME) Payment Program.  The CHGME Payment Program provides federal funds to freestanding children’s hospitals to help them maintain their graduate medical education programs that train pediatric and other residents.  The United States further contended that CNMC filed cost reports misstating their overhead costs, resulting in overpayment from Medicare and the Virginia and District of Columbia Medicaid programs.

The settlement resolves allegations brought in a lawsuit filed under the qui tam or whistleblower provisions of the False Claims Act by James A. Roark Sr., a former employee of CNMC.  Under the act, a private citizen can sue on behalf of the United States and share in any recovery.  The United States is entitled to intervene in the lawsuit, as it did here.  As part of the resolution, Mr. Roark will receive $1,890,649.98.

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 $24.3 billion through False Claims Act cases, with more than $15.3 billion of that amount recovered in cases involving fraud against federal health care programs.

This matter was handled by the U.S. Attorney’s Office of the District of Columbia with assistance from the Civil Division’s Commercial Litigation Branch and the HHS’ Office of Inspector General.

The case is United States ex rel. Roark v. Children’s Hosp., et al., No. 1:14-cv-00616 (D.D.C.).

The claims resolved by the settlement are allegations only, and there has been no determination of liability.


James Hoyer Client Wins Whistleblower of the Year Award


At TAF Awards ceremony (Pictured L-R): James Hoyer Partner Elaine Stromgren, Elin Baklid-Kunz, Attorney Marlan Wilbanks

James Hoyer Managing Partner Chris Casper was proud to be local counsel, along with lead-counsel Marlan Wilbanks, for Elin Baklid-Kunz, whistleblower in the $86-million dollar Halifax Hospital settlement.  Elin was named the Taxpayers Against Fraud Education Fund Whistleblower of the Year, at an awards ceremony in Washington, D.C.

Upon receiving the award, Elin expressed her sincere gratitude and talked about the often difficult road whistleblowers face to do the right thing.  She said her family and attorneys provided her with incomparable support to help her through the process.

Elin first came to America from Norway as an au pair to learn English and pursue the American dream.  She started working at Halifax in 1994 while pursuing her Masters of Business Administration at Stetson University.  She became Halifax’s Compliance Officer in 2005 and was promoted to Director of Physician Services for Halifax Health Systems in 2008.

As Director of Physician Services, Elin became concerned that Halifax was making improper payments to doctors for referrals, in violation of the Stark Law.  The Stark Law is intended to prevent incentives to doctors which could entice them to make referral decisions based upon financial gain, instead of the patient’s best interest.  Elin also encountered an internal report that indicated Halifax neurosurgeons were performing medically unnecessary surgeries and admitting patients who did not meet admissions criteria.  This led to what she believes were millions of dollars in fraudulent charges to Medicaid and Medicare.   After reporting her concerns to Halifax and having them fall upon deaf ears, Elin felt she had no choice but to file a False Claims Act case on behalf of U.S. taxpayers.

Elin was presented the Whistleblower of the Year award by Cheryl Meads, whistleblower in the $96 million case against GlaxSmithKline which settled in 2010.  Meads commended Elin for her action and  not just standing by when American taxpayers were being defrauded and patients were being harmed.  She ended with a quote from Bobby Kennedy saying, “Few will have the greatness to bend history itself; but each of us can work to change a small portion of events, and in the total; of all those acts will be written the history of this generation.”

We applaud Elin for doing her part to stand on the right side of history.


Hospital System Pays $98 Million to Settle Whistleblower Suit on Improper Emergency Room Admissions

The Justice Department announced that Community Health Systems Inc. (CHS), the nation’s largest operator of acute care hospitals, has agreed to pay $98.15 million to resolve multiple lawsuits alleging that the company knowingly billed government health care programs for inpatient services that should have been billed as outpatient or observation services.  The settlement also resolves allegations that one of the company’s affiliated hospitals, Laredo Medical Center (LMC), improperly billed the Medicare program for certain inpatient procedures and for services rendered to patients referred in violation of the Physician Self-Referral Law, commonly known as the Stark Law.  CHS is based in Franklin, Tennessee, and has 206 affiliated hospitals in 29 states.

“Charging the government for higher cost inpatient services that patients do not need wastes the country’s health care resources,” said Assistant Attorney General Stuart F. Delery for the Justice Department’s Civil Division.  “In addition, providing physicians with financial incentives to refer patients compromises medical judgment and risks depriving patients of the most appropriate health care available.  This department will continue its work to stop this type of abuse of the nation’s health care resources and to ensure patients receive the most appropriate care.”

Click here to read more from the Department of Justice.