New Jersey Whistleblower Lawyer Blog

Just before year-end, GE healthcare agreed to pay $30 million to the United States Department of Justice. The case was filed by a salesman in Michigan. James Wagel alleged that a company owned by GE healthcare marketed a diagnostic drug used in cardiology testing improperly. The drug involved in the case is named Myoview.

The case is very interesting in that GE healthcare acquired Nycomed Amersham. Nycomed, a New Jersey company, allegedly told doctors how to “stretch” the drug. The drug enables doctors to see blood flow in a patient's heart and helps the doctor detect coronary heart disease. Some doctors were using less than the total amount of the solution during the diagnostic procedure. By using less than the total amount of the solution, the doctors were able to “stretch” the number of procedures completed with the same amount of solution. The doctors then charge Medicare for the procedure.

Unfortunately, the diluted product sometimes resulted in false positives during cardiology testing and exposed the patient to additional and unnecessary testing.

These drug “stretching” cases have been around for years. In this particular case it was a solution that was being used in other cases. It may be a liquid treatment, pills or other types of treatments which are used to overbill the government.

If you are witness to illegal “stretching,” contact a qualified New Jersey whistleblower lawyer.

Source: GE Healthcare Inc. Pays $30 Million to Resolve False Claims Act Allegations

It seems that some companies never learn when it comes to false claims against the United States government. Omnicare is in the business of providing prescription drugs to elderly patients, and, has a particular pedigree in supplying nursing homes. Omnicare operates in at least 16 states, and, has 2 locations in New Jersey.

In 2010 Omnicare paid nearly $100 million to settle a whistleblower and kickback lawsuit. According to a recently filed lawsuit in The Federal Court, Omnicare has developed a new way to overcharge the United States and individual state governments.

A whistleblower, Peter Ordeanu, alleges that while working for the company or its predecessors, he learned that Omnicare regularly inflated the amount of money billed for dispensing drugs. The fraud involved Omnicare changing the National Drug Code number (“NDC” number) on the drug dispensed to the patient. By changing the NDC number the actual name or type of the drug dispensed was masked. The whistleblower claims that by changing the label, the US and state governments were overcharged by millions of dollars.

According to the complaint, in one egregious example, the oral liquid compound Vancomycin was priced at more than $1000 by changing the label. The compound requires 2 separate vials, and each vial costs approximately $2.00. When the whistleblower reported that the labels did not “match” the compound ingredients, he was told that it was “company policy”. After mentioning other discrepancies in the billing systems, the whistleblower was terminated.

The activity alleged in this particular fraud is similar to a practice that was prosecuted a number of years ago against pharmacy benefit managers.

Omnicare supplies nursing homes and individual patients throughout the country. It is not known exactly how many individuals or facilities Omnicare may service in the state of New Jersey.

If you are aware of mislabeling, changing the quantity or contents of products that are sold to or paid for by the United States government or in an individual state, you should contact a qualified whistleblower attorney.

Source: Omnicare Agrees to Settle Suit Over Reimbursement Claims

If you understand the current interplay between Average Wholesale Price (AWP), ingredient cost, discounts off AWP given by Pharmacy Benefit Managers (PBMs) and other elements that go into drug pricing, please give me a call as the more I learn, it is apparent the less that I know.
However, I do know one thing: any mother or father who shops in a supermarket would understand the basic cost of salt and sugar. I would bet that if you walked into any supermarket in the country and asked any individual, regardless of their native language, they would come within $3.00 of guessing the price of the appropriate cost of a pound of sugar or a pound of salt.
Imagine how shocked anyone would be to learn that Baxter International was selling “bags” of salt and sugar to Medicaid according to a lawsuit filed by the State of Louisiana. Now, admittedly, the “bag” of salt and the “bag” of sugar sold to Medicaid were actually in the form of a saline solution and a dextrose solution. The solutions were provided in intravenous drip bags. The drip bags are more difficult to produce than buying salt or sugar off the shelf, however, not terribly difficult.
In a study, the Department of Justice determined that the appropriate AWP for a dextrose solution (sugar) would be around $2.75 a bag. The AWP for a saline solution (salt) was $1.71 per bag. The lawsuit in Louisiana alleges that Baxter International charged $928.51 per bag for saline and dextrose.
It is truly amazing that these simple solutions of readily available products can be subject to such an overcharge. However, it is the current state of our health care system.
The lawsuit was brought against many defendants for overcharges to the Louisiana health care system. We cannot be sure as to whether or not New Jersey has brought any such action or participated in the settlement of national claims.
It might be interesting to look and see how the State of New Jersey’s participation in these lawsuits may have resulted in a recovery of monies that could offset the current budget deficit.

If you are aware of overcharges made to the State or Federal Government, you may be entitled to a reward as a “relator”. Contact a qualified New Jersey Whistleblower lawyer to discuss your information.

Related Web Sources:
$928 for a Bag of Salt: How Drugmakers Rip Off Taxpayers (By Jim Edwards)

A number of recent cases have shown that the drug companies are prepared to pay millions and, sometimes, billions of dollars to settle cases involving prescribing drugs for unapproved uses. These “Qui Tam” matters are brought by individuals who have learned information that is not otherwise available to the Federal Government. New Jersey has a similar “Whistleblower Law” technically referred to as the “False Claims Act”.

Of interest in the recent cases with settlements is the fact that there has been no real action taken against the doctors who may be the worst offenders in prescribing the drugs. According to ProPublica, statistics show that 15 drug and medical device companies have paid $6.5 billion since 2008 to settle accusations of either marketing fraud or payment of kickbacks. In the various suits, approximately 75 doctors were named as being involved but none of the doctors were sanctioned in any way.

Drug maker Eli Lilly pleaded guilty to illegally marketing an anti-psychotic drug “Zyprexa”. Eli Lilly paid $1.4 billion in criminal penalties and settlements in the various civil lawsuits. Interestingly, one doctor, psychiatrist George Jerusalem, prescribed more than $1 million a year worth of Zyprexa. Dr. Jerusalem was a consulting psychiatrist to more than 100 nursing homes and was treating between 3,000 and 5,000 residents. Among other allegations, it was alleged that Eli Lilly had paid Dr. Jerusalem in excess of $50,000.00 in “consulting fees”.

Continue reading "Making the Doctor Connection in Off- Label Drug Prescriptons" »

NEW JERSEY DOCTOR PLEADS GUILTY TO HEALTH CARE FRAUD

Only in New Jersey can you have a doctor bill nearly a million dollars in charges to Medicare and Medicaid in less than eighteen months. It is obviously very difficult to bill those kinds of numbers working alone; however, Dr. Yousuf Masood and his wife came up with a plan to produce these kinds of numbers. Dr. Masood hired three medical school graduates who had failed to pass the required test to become licensed to practice medicine in New Jersey. In court, the Masoods admitted they knew that the three they had hired were not licensed to practice medicine in New Jersey. To add insult to injury, it was learned that two of the three individuals hired by Dr. Masood were found through Craig’s List.

On April 21, 2011, both husband and wife pled guilty in Federal Court to one count each of conspiracy to commit healthcare fraud according to the U.S. Attorney for the District of New Jersey. As part of the guilty plea, Dr. Masood indicated that he had billed Medicare and Medicaid for more than 20,000 patient visits. The doctor claimed that he had performed the patient exams, when in fact the exams were completed by the three unlicensed physicians. During 2009, Dr. Masood was the top Medicaid prescribing doctor in the state of New Jersey. Interestingly, his prescriptions exceeded nine million dollars in one year. The second highest drug-prescribing doctor in the state of New Jersey did not reach six million dollars in prescriptions during that same year.

If you are aware of a doctor or doctor’s office allowing unlicensed physicians to practice or improperly prescribing prescription drugs, you should speak with a qualified New Jersey attorney.

Recently, there have been a number of articles on the New Jersey School Construction Corporation. The original "SCC" was charged with building schools in areas of need. However, many years later we are left to wonder about the success of the program. Pundits say that hundreds of millions of dollars have been spent, with no real accounting. Supporters feel that schools have been completed in areas that might not have been otherwise helped.
The original "SCC" was abolished in 2007 and replaced by the School Construction Authority.
Governor Christie recently stopped payments on a Burlington County high school. The reason; the $27 million project was $17 million over budget. Where does all the money go? Some goes to acquiring property. However, in Gloucester City $13 million was spent acquiring 70 properties and no school has been built. In Camden, 34 properties were acquired and no school there either.
Many believe that there is waste and fraud that has siphoned off money. Interestingly, there is now a way for the state to recover the money lost through fraud. In 2008 New Jersey instituted a False Claims Act. The Act allows individuals to be paid for disclosing fraud to the State of New Jersey.

UPCODING AND OTHER HOSPITAL FRAUD

Over the past couple of weeks, the Federal Courts have passed on a spate of fraud allegations against hospitals. In the past, New Jersey hospitals have been hit with similar claims and, in fact, some New Jersey hospitals have settled with the Federal Government for these allegations of fraud. The claims allege what amounts to improper or inflated billing practices. The terms of art for inflated billing is “upcoding”. Upcoding is basically where the hospital bills for a procedure which may have been more intricate and provides for a larger reimbursement from the Federal Government. The “upcoding” refers to a different billing “code” that the Federal Government assigns to certain procedures. By submitting a claim for a more difficult or intricate procedure, the hospital is reimbursed a larger amount of money. Although there are variants on this upcoding issue, a qualified fraud attorney can explain the intricacies.

“Upcoding” can occur in hospitals as well as physician’s offices, nursing homes or, for that matter, dental offices and counselors' offices. The upcoding can come in the form of billing for a more difficult procedure but it can also come in the form of billing for a longer procedure. For example, a false claim was brought against a counselor for billing for one-hour sessions when in fact the sessions were only lasting 45 minutes. After the fraud was reported, the investigators engaged in some simple math. The accumulation of the hours billed by the professional far exceeded that which was possible.

The claims for upcoding can be very difficult to prove and nearly always require documentation. Basically, the report of fraud would have to be made by someone who had specific and direct knowledge of the actual procedure that was performed. Very often, these cases are reported by nurses or other professionals who are directly involved in patient care. The delicate balance is reporting the factual basis for the “upcoding” violation without violating privacy rules of the patient.

If you have been witness to, or are concerned about, upcoding violations in New Jersey, you should speak to a qualified New Jersey Whistleblower lawyer.

As a New Jersey Whistleblower Attorney I am truly amazing how long whistleblower cases can take! This is best exemplified by the recent IRS announcement of their FIRST award. The time lapse is interesting because the IRS established a whistleblower office in 2006. Nearly five years later, the IRS announces its first award to a whistleblower.

The facts are fairly interesting in that the whistleblower was actually an accountant. The accountant reported the underpayment of in excess of $20 million in taxes and interests from a financial services firm. At the time of the report, the accountant was working for the company he reported.

The “new” IRS program announced in 2006 was designed to encourage tips in larger cases and the awards to the person supplying the information can vary between 15% and 30% of the amount of money recovered by the IRS. The IRS awarded the whistleblower 22% of the taxes recovered.

One of the fascinating aspects of the IRS whistleblower provisions is the possibility of remaining anonymous. Any report of the information is pursued by the IRS and, if the whistleblower so chooses, the name will not be released. This is somewhat attractive to some whistleblowers, who remain in the employ of the entity they are reporting on.

In an interesting piece of irony, the IRS mailed the award check to the whistleblower by first class mail. As if the use of first class mail was not ironic enough in this day and age, the check sent to the whistleblower was in the amount of $3.24 million. The difference between the $4.5 million awarded and the $3.24 million sent was a 28% tax!

The interesting aspect of this recent award is that almost every “fraud” against the government has some “tax fraud” aspect. If there is any underpayment to the government of monies owed and these monies are not reported as income, this can certainly qualify as a "tax fraud.”

The recent announcement of the first award from the IRS and its significant size may prompt others to consider this alternative instead of a more “traditional” whistleblower-type lawsuit.

Also interesting is the fact that the individual whistleblower attempted to pursue the matter himself and the matter languished. After the whistleblower hired an attorney, the matter seemed to move along.

The IRS whistleblower office submits an annual report to congress. The annual report indicates that the IRS whistleblower office receives nearly 1,000 tips per year. The tips received by the office often allege tax underpayments of more than $10 million, and there are some instances of reported underpayments of in excess of $100 million. Needless to say, this will be an interesting subset of whistleblower representation. Knowing the limitations of the whistleblower office, the program is only “accepting” reports of fraud in excess of $2 million.

What the heck is a Compendium, and better yet, what the heck is the Compendium of Unimplemented Recommendations? AND how could it be used in New Jersey?

In March, 2011, the Department of Health and Human Services, Office of the Inspector General (OIG) issued its “Compendium of Unimplemented Recommendations”. On first blush, it is hard to imagine that any entity called the “Office of Inspector General” would issue a publication which outlines ways to save money or improve the programs that were not undertaken. However, a deeper analysis is necessary. The compendium outlines the implementation of cost savings or improvements which require either legislative, regulatory or administration action and, in some cases, more than one of the three actions are necessary.

The compendium covers Medicare, Medicaid and Public Health and Human Services as different parts of the compendium. The compendium, in the opening pages, makes a number of “priority recommendations.” The priority recommendations vary from non-monetary recommendations to suggestions that have estimated savings exceeding $3 billion. The recommendations also provide ideas for the Food and Drug Administration, the National Institutes of Health, the Indian Health Service, Medicaid and other federal entities.

It is also interesting to see there are some specific suggestions regarding, among others, home health agencies, ambulatory surgical centers and hospitals. It is reasonable to expect that these recommendations will form the basis for future areas for improvement as well as scrutiny by entities that pay for any of these services. It is also expected that these can be areas for review for individuals who think that some of the particular conduct that they have observed or have been asked to participate in is something that can properly be reported to the federal government.

It may be beneficial for any employee working in or for a home health agency, an ambulatory surgical center, hospital, nursing home, hospice, rural health clinic, laboratory or imaging service in New Jersey consider looking at the recommendations of the compendium.

Naturally, if you work in the health care area and become aware of any fraudulent claims being made to the government, you should contact a qualified New Jersey fraud attorney.

Kid Brand announced the termination of two executives because of problems involving underpayment of customs duty on furniture. The New Jersey company appears to owe as much as $7 million to U.S. Customs.
The allegation against the company, and subsidiary LaLobi, relates to duty that should have been paid on furniture manufactured in China. The duty is owed because of what is referred to as "anti-dumping" provisions. "Dumping" is a practice where a manufacturer sells a product at or below the actual production cost. The Customs Service imposes the duty to "level the playing field" for U.S. manufacturers.
It has not yet been disclosed how the information came to the attention of Custom officials. However, if the information was brought to the officials' attention by a "whistleblower" the Federal Government will be paying a "relator fee" of up to 30%. It is unusual for the government to pay the full 30%. Rewards of 15-20% are not unusual. If a relator is involved a reward of around $1.4 million can be expected.

A telecommunications company paid $16.5 Million for improper billing practices. Avaya, a New Jersey-based company, billed governmental agencies for telephone equipment that either didn't work or had been replaced. A concerned individual brought the improper conduct to light. Under the Federal Whistleblower Statute, the individual will be paid for providing the information. Although it has yet to be announced, the amount paid to the person disclosing the information will exceed $ 3 million. If you know of improper billing practices like this, call us.