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Dental management company Benevis LLC (formerly known as NCDR LLC) and more than 130 of its affiliated Kool Smiles dental clinics for which Benevis provides business management and administrative services, will pay the United States and participating states a total of $23.9 million, plus interest, to resolve allegations that they knowingly submitted false claims for payment to state Medicaid programs for medically unnecessary dental services performed on children insured by Medicaid.

 The United States alleged that between January 2009 and December 2011, Benevis and Kool Smiles clinics located throughout 17 states knowingly submitted false claims to state Medicaid programs for medically unnecessary pulpotomies (baby root canals), tooth extractions, and stainless steel crowns, in addition to seeking payment for pulpotomies that were never performed.  The United States alleges that Kool Smiles clinics routinely pressured and incentivized dentists to meet production goals through a system that disciplined “unproductive” dentists and awarded “productive” dentists with substantial cash bonuses based on the revenue generated by the procedures they performed.  According to the government’s allegations, Kool Smiles clinics ignored complaints from their own dentists regarding overutilization.  In addition, the United States further alleged that Kool Smiles clinics located in Texas knowingly submitted false claims to the Texas Medicaid Program for First Dental Home (FDH), a program intended to provide a comprehensive package of dental services aimed at improving the oral health of children under three years of age.  These clinics are alleged to have submitted false claims for FDH services that were not fully provided.

Of the $23.9 million to be paid by Benevis and its affiliated Kool Smiles clinics, the federal government will receive a total of $14,244,073.49, plus interest, and a total of $9,655,926.51, plus interest, will be returned to individual states, which jointly funded improper claims submitted to state Medicaid programs.

Several Pharmhigh-prices-300x200aceutical Companies Started 2018 by Increasing Drug Prices

Big Pharma rang in the New Year by having customers ring up higher drug prices at the checkout counter.  According to Stat News, several big-name drug makers hiked prices up nearly 10%.

Allergan (AGN) upped the price of 18 medicines by 9.5 percent. This particular number was reached to keep the drug maker to its pledge of “no double-digit” price hikes. The pledge was made as part of social contract issued over growing anger at the price of medication. Allergan did release a statement noting the new prices stay within the range of their pledge. They are one of the few drug companies to actually make the pledge.

A federal judge who ruled against Pricewaterhousecoopers could cost the auditor more than $1 billion in damages and help to establish law that auditors may be liable for failing to detect fraud. The case involves the Colonial Bank Group against Pricewaterhouse, which was auditing the bank. The bank ultimately failed after a major fraud was discovered between the bank and mortgage originator Taylor Bean & Whitaker. The case was for professional malpractice and was the first suit against an auditor in a financial crisis era bank fraud case.

The Colonial Bank failure cost the FDIC’s deposit insurance fund $2.3 billion according to the FDIC.

The Judge in the case, U.S. District Court Judge Barbara Jacobs Rothstein gave the FDIC a victory in one of three claims brought against Pricewaterhouse and said in her decision that PWC could have uncovered the fraud by inspecting some of the underlying documents for the mortgages at issue but didn’t.

The Justice Department Nets Billions in 2017 Through Healthcare Fraud Caseshealthcare fraud

The Department of Justice announced that in 2017 it recovered $2.4 billion from federal healthcare fraud cases. According to Health Payer Intelligence, this total added up to well over half of all the money recovered by the DOJ fraud investigations.

Healthcare fraud investigations account for 64% of the $3.7 billion recovered by DOJ across all industries, including housing and mortgage sectors, small business contracts, military contracts, and additional areas of oversight that fall under the False Claims Act.

Growing Resistance to Antibiotics and How its Changing Routine Surgery

 One of the most significant steps in preparation for surgery is the dose of prophylactic antibiotics that a patient receives before the actual procedure even begins. Because antibiotics have helped to reduce the risk of infection during surgery to a minimum, the majority of the population and the medical community alike consider a routine surgery to be safe.

The Changing Role of Antibiotics

Whistleblower Beverly Brown has received a  award of more than $78 million for her efforts in obtaining a $280 million False Claims Act settlement against Celgene Corporation. The  reward and settlement amounts are among the largest ever to date.y. The False Claims Act allows whistleblowers  to bring suit in the name of the government against individuals or entities that caused the fraudulent or improper expenditure of government funds. If the case is successful, the relators receive a portion of the government’s recovery, known as a “relator share.”

Beverly Brown is a former Celgene sales representative who filed suit against Celgene saying that the company illegally promoted two of its drugs – Thalomid and Revlimid – for uses that were not approved by the FDA and also that Celgene paid illegal kickbacks to healthcare providers and others  to increase the sales of its drugs. After the suit was filed, the case remained under seal for four years while the government investigated.

The case was then heavily  litigated  including a review of millions of documents, numerous discovery motions, 40 fact and expert depositions, and dozens of pre-trial motions.

 Pharmaceutical company United Therapeutics Corporation  has agreed to pay $210 million to resolve claims that it used a foundation as a conduit to pay the copays of Medicare patients taking UT’s pulmonary arterial hypertension drugs, in violation of the False Claims Act, the Justice Department announced today.
When a Medicare beneficiary obtains a prescription drug covered by Medicare Part B or Part D, the beneficiary may be required to make a partial payment, which may take the form of a copayment, coinsurance, or deductible (collectively “copays”).  These copay obligations may be substantial for expensive medications.  Congress included copay requirements in these programs, in part, to encourage market forces to serve as a check on health care costs—including the prices that pharmaceutical manufacturers can demand for their drugs.  Under the Anti-Kickback Statute, a pharmaceutical company is prohibited from offering or paying, directly or indirectly, any remuneration—which includes money or any other thing of value— to induce Medicare patients to purchase the company’s product.

UT sells a number of pulmonary arterial hypertension drugs, including Adcirca, Remodulin, Tyvaso, and Orenitram (the “Subject Dugs”).  The government alleged that UT used a foundation, which claims 501(c)(3) status for tax purposes, as a conduit to pay the copay obligations of thousands of Medicare patients taking the Subject Drugs.  In particular, from 2010 to 2014, UT allegedly made donations to the foundation, which, in turn, used those donations to pay copays for the Subject Drugs to induce patients to purchase these drugs.  The government alleged that UT routinely obtained data from the foundation detailing how much the foundation had spent for patients on each Subject Drug and that this data was used by UT to decide how much to donate to the foundation.  The Government also alleged that UT had a policy of not permitting needy Medicare patients to participate in its free drug program, which was open to other financially needy patients, and instead referred Medicare patients to the foundation, which allowed claims to be submitted to Medicare.

 Two physician groups, EmCare Inc. (EmCare) and Physician’s Alliance Ltd (PAL), for allegedly receiving illegal remuneration in exchange for patient referrals to hospitals owned by the now-defunct Health Management Associates (HMA).  EmCare provides physicians to hospitals to staff their Emergency Departments .  Under the settlement with EmCare, the physician group will pay $29.6 million to resolve allegations that, from 2008 through 2012, EmCare received remuneration from HMA to recommend patients be admitted to HMA hospitals on an inpatient basis when the patients should have been treated on an outpatient basis.  On average, Medicare pays at least three times as much for an inpatient admission as it does for outpatient care.  As part of the alleged scheme, HMA made certain bonus payments to EmCare ED physicians and tied EmCare’s retention of existing contracts and receipt of new contracts to increased admissions of patients who came to the ED. In a separate settlement, PAL, headquartered in Lancaster, Pennsylvania, and three of its executives, Lee Meyers, Michael Warren, M.D. and Wallace Longton, M.D., agreed to resolve allegations that, from 2009 until 2012, PAL accepted illegal remuneration from HMA to refer patients to two HMA hospitals, Lancaster Regional Medical Center and Heart of Lancaster Medical Center.  Under the settlement, PAL and its executives will pay $4 million plus a percentage of proceeds from the sale of PAL’s interest in a joint venture with HMA.

Envision Healthcare Corporation (Envision) has also entered into a Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General as part of the resolution of the EmCare matter.  EmCare is a subsidiary of Envision. Under the qui tam, or whistleblower, provisions of the False Claims Act, private individuals may sue on behalf of the government for false claims and share in any recovery.  The EmCare settlement resolves a qui tam lawsuit filed by Drs. Thomas Mason and Stephen Folstad, whose medical practice, MEMA, previously supplied ED physicians to two HMA hospitals in North Carolina.  In connection with the settlement, Drs. Mason and Folstad will receive $6,222,907.

The settlements were the result of a coordinated effort by the Civil Division of the Department of Justice and, in the EmCare matter, the United States Attorney’s Office for the Western District of North Carolina, and in the PAL matter, the United States Attorney’s Office for the Eastern District of Pennsylvania.  The investigations were conducted by the Office of Inspector General of the United States Department of Health and Human Services and the Federal Bureau of Investigation.

hep-300x200It Will Now be Easier for Medicaid Patients to Get Treatment for Hepatitis C in Colorado

Controversial Medicaid restrictions are being pulled back in Colorado. Now, patients seeking treatment for Hepatitis C will no longer have to be in an advanced state of liver failure to have access to certain drugs and procedures. The move comes after a lawsuit called into question the state’s practice of only providing meds to the sickest of patients.

Lawsuits Filed

The Sixth Circuit U.S. Court of Appeals has revived a shareholder class-action lawsuit against Community Health Systems, alleging the for-profit hospital operator deceived shareholders by keeping secret that its profits were based on Medicare fraud. Shareholders sued CHS in 2011, claiming the company followed a policy that encouraged physicians to admit Medicare patients to the hospital instead of treating them in less lucrative outpatient settings. The Complaint was filed on April 11, 2011,  by Dallas-based Tenet Healthcare, which sued CHS to avoid a hostile takeover bid. Immediately after Tenet sued, CHS issued a press release stating Tenet’s allegations were meritless. However, Larry Cash, who then served as CHS’ CFO, allegedly admitted the company’s hospitals did use the Blue Book, a guide CHS created that prompted physicians to provide inpatient services for many conditions other hospitals would treat as outpatient cases. Mr. Cash said 30 of CHS’ hospital had already quit using the Blue Book, and the rest would do so by the end of 2011, according to court documents.

In October 2011, CHS released weaker-than-expected earnings. On an earnings call, Mr. Cash said inpatient admissions had declined at 75 percent of its hospitals after physicians phased out the Blue Book. On that same call, CHS Chairman and CEO Wayne Smith said, “there’s no question we’ve had some adverse impact related to issues … around the Tenet lawsuit,” according to court documents. After the admissions by executives, CHS’ stock price dropped another 11 percent. Shareholders subsequently sued CHS, claiming they lost a combined $891 million in the little more than six months between April 11, 2011, when Tenet sued, and Oct. 27, 2011, the day after the earnings call and the executive admissions.  Although CHS continued to deny Tenet’s allegations, the company paid  $98.15 million settlement with the Department of Justice in 2014 to resolve allegations it knowingly billed government payers for inpatient services that should have been billed as outpatient or observation services.

The district court dismissed the lawsuit filed by shareholders in 2016. The court said the shareholders failed to show Tent’s lawsuit caused CHS’ stock to drop and triggered their losses. On Wednesday, an appeals panel revived the shareholder suit, finding that CHS executives’ public admissions combined with the fraud allegations were enough to keep the shareholders’ lawsuit alive.