Articles Posted in Health Care Fraud

On July 26, 2013, the Department of Justice announced the settlement with Dubuis Health System. Dubuis operates long-term acute care hospitals in a number of states located in the Southern East and South Western United States. The health system does not operate any facilities in the state of New Jersey.

A former Administrator at Southern Crescent (part of the health system) alleged that the health system kept patients hospitalized beyond what should have been considered “medically necessary”. The health system did this for two reasons; the system would receive a higher rate of Medicare reimbursement and, the health system could maintain its classification as a long-term acute care facility.

It was alleged that the fraud occurred between 2003 and 2009. It is not known whether or not there were allegations before or after these dates of fraud.

The health system agreed to pay $8 million to resolve the allegations. The whistleblower will receive a little more than $2.1 million of the recovery by the United States government.

Healthcare fraud, including long-term acute care facilities, nursing homes, and hospice has been a hot topic over the last number of years. The False Claims Act, a federal statute, has provided a vehicle for the federal government to become aware of the fraud. Very often, the fraud is not known to the federal government and is brought to the attention of the Department of Justice by an individual. The individual can be an employee, a competitor, or, in some cases, a patient. The individual that brings the fraud to the attention of the federal government is called a “relator”. The False Claims Act provides for the relator to receive an award based upon the success of the case. The False Claims Act is very particular and has significant requirements including the need for the information to not have been public and the relator must be the first person to bring the information to the attention of the federal government. For this reason, relators often seek the services of a whistleblower lawyer with experience in the area. The False Claims Act provides for an award of between 15% and 30% of the amount recovered by the federal government.

Although this healthcare system did not maintain facilities in the state of New Jersey, if New Jersey had paid any of the bills which were improper, there would have been a recovery for the state of New Jersey as well. This is due to the fact that the state of New Jersey passed a False Claims Act in 2008. The New Jersey False Claims Act, very similar to the Federal False Claims Act, provides for a vehicle to report fraud against the state of New Jersey or state authorities.
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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

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”.
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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.

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.

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.