Class Action Blog : Consumer Fraud, Consumer Protection, Securities and Antitrust Lawyer & Attorney : Meiselman, Denlea, Packman, Carton & Eberz

During the last week of September 2011, a report by New York State auditors was released indicating that many nursing homes in the State of New York were failing to collect available funds from their residents’ income, including Social Security and pensions, to offset health care provided; and were instead routinely and automatically submitting the medical claims to Medicaid. The failure of local governments to enforce the rules requiring collection from nursing home residents’ income caused overpayments of $42 million during a 3 ½ year period.

Medicaid costs, which are passed on to taxpayers, are mounting rapidly. Over the past 4 years, New York State’s Medicaid program grew from 4.6 million recipients to 5.2 million recipients. The total cost of Medicaid has grown from $43 billion to $53 billion during that same period. Of those sums, the State Medicaid program currently pays nearly $7 billion for nursing home care for 121,000 State citizens.

If you have information about nursing homes that are conducting themselves in an inappropriate manner, including, but not limited to fraudulent billing or providing medically unnecessary tests, we would like to discuss with you legal action to curb these serious abuses. Please contact us to discuss what you have observed. Your contact with us will be held in strict confidence.

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More so than ever, pharmaceutical companies are getting caught offering incentives to their sales representatives to advocate to medical providers to prescribe their medications for off-label use. That is, for use in treating various diseases which have not been approved by the Food & Drug Administration (“FDA”). As a result, a number of pharmaceutical representatives have reaped huge rewards from successful Qui-Tam actions which are lawsuits filed under the False Claims Act.

Many recent examples abound, such as a whistleblower action filed by a former Pfizer sales representative against Pfizer alleging that the company promoted the sale of four drugs -- Bextra, Geodon, Zyvox, and Lyrica -- for unapproved uses, which in turn caused Medicaid and Medicare to pay false claims for reimbursement submitted to them by medical providers across the country. In 2009, after a six-year legal battle, Pfizer settled the case for $2.3 billion dollars. The former sales representative was awarded $51 million dollars as a result.

One of the very first such Qui-Tam lawsuits was filed 14 years ago by another former Pfizer employee, David Franklin. The whistleblower suit alleged that the Pfizer was illegally promoting the prescription drug Neurontin for off-label uses.  Indeed, during one training trip for its sales representatives, the company videotaped its lawyers instructing Pfizer employees that off-label promotion was illegal. The whistleblower suit alleged that Pfizer then proceeded to turn off the videotape, joked about making sure it was off, and trained their representatives on how to break the law and promote off-label uses. As a result, Pfizer sales representatives were promoting Neurontin to medical providers for treatment of seizures, bipolar disorders, migraines and other ailments.

Even though the government decided not to intervene and prosecute the case, Mr. Franklin continued with his Qui-Tam lawsuit on his own. Pfizer finally settled the action this year for $430 million and Mr. Franklin was awarded about $26 million for his whistleblower role.

Another famous Qui-Tam lawsuit was filed by 6 employees of Eli Lilly & Company alleging that Zyprexa was marketed off-label for untested and unapproved uses.  Eli Lilly allegedly created a sales team of 180 "specialty" sales representatives to promote Zyprexa for a number of off-label, unapproved FDA uses to sedate and control elderly nursing home residents exhibiting symptoms of agitation, anxiety, insomnia, depression and dementia. But the medication had been approved by the FDA to treat only bipolar and schizophrenic patients. In 2009, the US Attorney's Office for the Eastern District of Pennsylvania announced that Lilly will pay $1.4 billion for its illegal off-label marketing of the antipsychotic drug. The six whistleblowers who brought the whistleblower suit will share approximately 18 percent of the recovery.

If you are a current or former employee of a pharmaceutical company and believe that your employer is engaged in unlawful practices, including promoting its medications for off-label uses thereby engaging in Medicaid and/or Medicare fraud, you may be entitled to a multi-million dollar award. You can help your fellow hardworking taxpayers -- and earn millions of dollars in the process -- by blowing the whistle on unlawful pharmaceutical practices.

If you know or suspect that a pharmaceutical company is engaged in unlawful sales practices, including Medicaid and/or Medicare fraud and/or promoting its medications for off-label treatments, please contact us to discuss your legal options.

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The new healthcare law recently passed by Congress and signed by president Obama includes significant changes and expansions of the federal False Claims Act (“FCA”), making it easier for whistleblowers to file a claim and potentially earn millions of dollars helping the government fight healthcare fraud.

In one of its more significant false claims provisions, the healthcare reform law imposes an explicit duty on physicians to return known overpayments to the government within 60 days of discovering an error. Retaining an overpayment beyond that deadline could constitute a false claim. Because the 60-day window is a short one, doctors should analyze their claims on a regular basis.

Moreover, the new healthcare bill states that anti-kickback violations can also give rise to false claims liability. And when it comes to anti-kickback claims, the government is no longer required to prove that a physician or another claimant had a specific intent to violate the law, making it easier for the federal government to prosecute. And because a wide range of activities could be considered kickbacks -- from discounts to referral fees to marketing practices -- medical providers should scrutinize their arrangements with other health care entities.

Most importantly, pursuant to the new healthcare bill, whistleblowers are given more opportunities to help root out fraud and the healthcare bill eliminates the “original source” requirement of the False claims Act. The health reform law now allows whistleblowers to initiate false claims actions based on information already publicly disclosed through state or local administrative reports or proceedings, such as a state Medicaid audit. In other words, a whistleblower no longer has to be the original source of the information to be able to use those additional facts to help build a case. The amendments to the healthcare bill effectively nullified a March 30 Supreme Court decision, Graham County Soil v. U.S., that held the so-called public disclosure bar was intended to limit a whistleblower's ability to use secondhand information to generate false claims cases.

 In sum, the health system overhaul includes changes to the federal False Claims Act and other anti-fraud statutes that:

·         Require physicians to return overpayments within 60 days of discovering a payment error;

·         Make it easier for the government to use anti-kickback violations as the basis for a false claims suit;

·         Allow whistleblowers to initiate lawsuits based on certain publicly disclosed information;

·         Permit physicians to self-disclose potential Stark violations; and

·         Allows the Centers for Medicare & Medicaid Services (“CMS”) the discretion to reduce repayment amounts for Stark violations.

If you are aware of Medicaid and/or Medicare fraud being committed against the United States government by a city, doctor, hospital, clinic, pharmacy and/or medical supply company, you may be entitled to a multi-million dollar award. You can help hardworking taxpayers from being cheated -- and earn millions of dollars in the process -- by blowing the whistle on Medicaid and Medicare fraud.

If you know or suspect that Medicaid and/or Medicare fraud is being committed anywhere in the country, please contact us to discuss your legal options.

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When a medical provider in New York State -- a hospital, doctor, clinic, pharmacy or medical supply company -- commits fraud against New York State, everyone pays.  You, as a taxpayer, end up picking up the state's losses through an increase in your state and local taxes.  But individuals who know of fraud being committed against New York State and/or New York City can put a stop to it by becoming whistleblowers.

Under New York State’s (and New York City’s) whistleblower law known as the False Claims Act (“FCA”), a whistleblower can bring a "Qui Tam" lawsuit against companies and individuals that are cheating New York State and/or New York City.   A Qui Tam lawsuit is an action filed by an individual on behalf of the state and/or city under the FCA.

In the face of widespread fraud and in an effort to strengthen New York State’s efforts to fight Medicaid fraud, which is driving up spending and taxes at the state and local levels, Senate Republican Leader Dean Skelos announced the creation of the Senate Republican Task Force on Medicaid Fraud.  “There is no excuse for tolerating any fraud in a program that is the fastest-growing and largest single component of state and county budgets,” said Senator Skelos.  “Medicaid fraud drives up state spending and taxes as well as local property taxes.  We must fight fraud aggressively, restore accountability and integrity to the Medicaid program, and ensure that tax dollars are spent wisely to help the people who really need help, not enrich criminals who prey on the system.”

“Medicaid fraud is possibly costing New York State taxpayers billions of dollars.  It’s crucial that we act immediately to prevent this type of fraud at the state and local levels,” said Senator Kemp Hannon.  “During a time when every single cent counts, we cannot afford to let the possibility of this amount of money fall through the cracks of the system through fraud and abuse.”

Indeed, whistleblowers are rewarded a significant portion of the proceeds collected on behalf of New York State or New York City.  In fact, whistleblowers are entitled to collect at a minimum 15% to 30% of the total amount of the fraudulent money recovered, and many whistleblowers have collected millions of dollars.

The widespread problem of Medicaid fraud has been highlighted by several reports issued by the state Comptroller’s office that documented millions of dollars in Medicaid overpayments and billing errors. Chemung County Executive Thomas J. Santulli, President of the New York Association of Counties, said, “Recently, New York City and forty-two New York Counties obtained a victory in federal court against 13 pharmaceutical manufacturers for fraudulent pricing through the Medicaid Program. These types of actions continue to demonstrate the relevance and importance of county governments insuring the integrity of the Medicaid Program in New York.” Moreover, in December, the state Comptroller released the results of an audit that identified as much as $92 million in Medicaid overpayments, billing errors and other problems.

If you are aware of Medicaid and/or Medicare fraud being committed against New York State and/or New York city by a doctor, hospital, clinic, pharmacy and/or medical supply company, you may be entitled to a multi-million dollar award.  You can help hardworking New York taxpayers from being cheated -- and earn millions of dollars in the process -- by blowing the whistle on Medicaid and Medicare fraud.

 If you know or suspect that Medicaid and/or Medicare fraud is being committed in New York, please contact us to discuss your legal options.

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When an individual, company, county or city commits fraud against the United States government, everyone pays. You, as a taxpayer, end up picking up the government's losses through an increase in your taxes. But individuals who know of fraud being committed against the government can put a stop to it by becoming whistleblowers.

Under the federal whistleblower law known as the False Claims Act (“FCA”), a whistleblower can bring a "Qui Tam" lawsuit against companies and individuals that are cheating the government. A Qui Tam lawsuit is an action filed by an individual on behalf of the federal government under the FCA. In the face of widespread fraud, Congress passed the FCA hoping that it would decrease fraud that results in the loss of hundreds of millions if not billions of dollars in public funds. The FCA prohibits presenting any false claim for reimbursement to the United States government, either intentionally or unintentionally, and eliminates the so called hear-no-evil see-no-evil defense. Examples of whistleblower lawsuits include Medicare and Medicaid fraud, defense contractor fraud, customs fraud, bid-rigging on government projects, environmental fraud and research fraud.

As an example of an individual filing a claim under the FCA, a speech therapist in New York, Hedy M. Cirrincione, filed a whistleblower lawsuit against Jefferson County, New York, claiming that the County had improperly collected Medicaid reimbursements. As a result of Ms. Cirrincione’s whistleblower suit, the case settled for a record-breaking $540 million, with Ms. Cirrincione collecting $10 million. The settlement set a record for a recovery for the Medicaid program, and is the seventh largest whistleblower suit in history.

In another example, the pharmaceutical company Amgen has been accused by a whistleblower of engaging in illegal kickbacks to promote sales of its anemia drug Aranesp. Kassie Westmoreland, a former Amgen sales representative, filed a whistleblower suit alleging that Amgen provided free samples of Aranesp to doctors and clinics. The free samples had small extra amounts of the drug, or overfill, in each vial. The medical practices could then make a profit by billing insurers, including state Medicaid programs, for the extra drug. The lawsuit asserts that New York’s Medicaid program was defrauded of at least $1.8 million.

In yet another example, South Texas Health Systems agreed to pay $27.5 million to settle a whistleblower suit claiming that it paid kickbacks to doctors who referred patients to its hospitals. The whistleblower suit was filed by a former employee of South Texas Health Systems, Bruce Moilan, who alleged the kickbacks were disguised through sham contracts. Mr. Moilan received $5.5 million in the settlement, and the rest of the money went to state and federal taxpayers, including $2.3 million to reimburse the Texas Medicaid program.

There are even whistleblower suits that are unconventional. For example, a sharp-eyed attorney in Washington, D.C. did some investigating after spotting patent markings on the lid to his daily cup of coffee and discovered that the patent had actually expired some 20 years before. Now the lawyer is seeking millions of dollars in damages in a Qui Tam suit against the lid maker, Solo Cup. This same attorney has also filed a similar suit against razor company Gillette. The U.S. Justice Department is also supporting a Qui Tam action in a separate case filed over Brooks Brothers' expired patent claim on its "original Adjustolox" bow tie. As such, consumers should take a look at items they use regularly, and see if the item has a patent number stamped upon it. It may be that the patent has expired, in which case a whistleblower action can be filed against the manufacturer.

If you are aware of fraud being committed against the government, you may be entitled to a multi-million dollar award.  You can help hardworking taxpayers from being cheated -- and earn millions of dollars in the process -- by blowing the whistle on fraud.

If you know or suspect that a business, corporation, municipality, city and/or state are defrauding the U.S. government, please contact us to aid you in an investigation and to discuss your legal options.

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Recently, we published two blog posts regarding lawsuits brought under the federal False Claims Act ("FCA").  In those posts, we explained how a consumer may file a Qui Tam action -- Latin for a lawsuit filed by an individual on behalf of the government pursuant to the federal False Claims Act -- against a company for engaging in fraud.  We also pointed out that such a lawsuit allows the filer to keep up to half of any damages recovered on behalf of the government.

In another example of a consumer filing a claim under the FCA, the biotechnology pharmaceutical company Amgen has been accused of engaging in illegal kickbacks to promote sales of its anemia drug Aranesp.  Kassie Westmoreland, a former Amgen sales representative, filed a whistleblower suit alleging that Amgen provided free samples of Aranesp to doctors and clinics.  The free samples had small extra amounts of the drug in each vial.  The medical practices could then make a profit by billing insurers, including state Medicaid programs, for the extra drug.

Regulations require that syringes and vials contain a tiny extra amount of drug.  This is meant to ensure that patients get a full dose.  The whistleblower suits allege that Amgen took advantage of this by increasing the amount of “overfill” in Aranesp vials beyond what was strictly necessary.  It then told medical providers that they could make more money if they used Aranesp because they could bill insurers -- or Medicaid -- for that extra amount whether they gave it all to a single patient or saved the extra portions to give to other patients.  For example, the states' lawsuit asserts that New York’s Medicaid program paid at least $1.8 million in reimbursements for the overfill from April, 2004 through July, 2009.

“In an egregious violation of the law, Amgen allegedly bribed medical providers and left taxpayers footing the bill for free drug samples,” said Andrew Cuomo, the attorney general of New York, whose office led the states’ investigation.

If you think, or have proof, that state Medicaid programs and/or the U.S. government are being defrauded, please contact us to discuss your potential whistleblower case.

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Recently, we published a blog post (see below) regarding expired patents and lawsuits brought under the federal False Claims Act (“Act”).  In that post, we explained how a consumer may file a Qui Tam action -- Latin for a lawsuit filed by an individual on behalf of the government pursuant to the federal False Claims Act -- against a company manufacturing an item with an expired patent.  We also pointed out that such a lawsuit allows the filer to keep half of any damages recovered on behalf of the government.

In another example of a consumer filing a claim under the False Claims Act, a speech therapist in New York, Hedy M. Cirrincione, triggered a federal investigation into claims that Jefferson County, New York, had improperly collected Medicaid reimbursement for services Ms. Cirrincione provided to disadvantaged children in several school districts.  As a result of Ms. Cirrincione’s whistleblower suit -- brought under the federal False Claims Act -- the case settled for a record-breaking $540 million, with Ms. Cirrincione collecting $10 million.  The settlement sets a record for a recovery for the Medicaid program, and is the seventh largest whistleblower suit in history.

In related news, Congress recently revised and strengthened certain portions of the federal False Claims Act, under which whistleblower suits are brought.  The new bill effectively overturns parts of the Supreme Court's unanimous decision last year in Allison Engine Co. v. United States ex rel. Sanders, 128 S. Ct. 2123 (2008), by removing the "to get" and "by the Government" language in section 3729(a)(2) that the Court applied in order to limit liability and keep the False Claims Act from becoming an all-purpose fraud statute.  The revised Act also includes a materiality requirement in the provisions that defines "material" as having a natural tendency to influence payment or approval of the claim, the "weaker" materiality standard which must be met to bring and win a whistleblower case.  As such, it is now easier for consumers to file suits under the Act, prove fraudulent conduct, and win their case.  Importantly, the revised False Claims Act also protects consumers from retaliation and discrimination if they file a whistleblower lawsuit.

Consumers who think, or have proof, that the U.S. government is being defrauded, should contact us to discuss their potential case.  With the revised language inserted in the Act by Congress, the standard of proof for fraudulent conduct has been lowered and individuals filing whistleblower suits do not to have to fear that they will be retaliated or discriminated against by the corporation or entity defrauding the government.  And individuals filing such cases may end up with an award of up to half of any damages collected.

If you know or suspect that a business, corporation, municipality, city and/or state are defrauding the U.S. government, please contact us to aid you in an investigation and to discuss your legal options.

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Most physicians are quite familiar with the following scenario. The insurance company advises the physician that he or she will be paid according to a certain fee schedule. Time passes, the physician examines the amounts reimbursed for services rendered and it is evident that the amounts paid are far less than what was agreed. The physician complains and the insurance company advises the physician that the fee schedule was modified and that the physician was notified about the modification before it was implemented and, in fact, had agreed to the modification. On further inquiry the insurance company explains that it faxed a “notice” to the physician informing the physician of the change and that unless the doctor opted out within a certain period of time (usually 30 days) the doctor is deemed to have accepted the revision. The insurance companies have used this notification methodology for years because they understand that most physicians are simply too busy to review every piece of paper that comes to them by fax or mail and that by the time the physician finds the “notice” (that is assuming the physician even received it), the physician is deemed as having accepted the modification. Such “notices” have been used to revise many important components of the provider-payor relationship.

Now the insurance companies are using this methodology coupled with potentially fraudulent practices to force physicians who never agreed to treat Medicaid patients to accept Medicaid patients at Medicaid rates. First, the insurance companies send the physicians the “notices” advising them that, unless they opt out within 30 days, they will be deemed as having accepted treating the insurance companies’ Medicaid insured at the Medicaid rates. The physicians never see the notices so they are deemed as having accepted the obligation. Second, when the Medicaid patients show up at the physicians’ offices, they present health coverage cards that identify them, not as Medicaid patients, but rather as commercial HMO patients (which has a higher reimbursement rate). The physicians render the services not realizing that they are treating Medicaid patients at Medicaid rates. It’s only when the physicians are reimbursed (assuming they are even reimbursed) that they realize what has happened. But by then it’s too late!

If you are a physician and find yourself encountering this situation, please contact us at mdpcelaw.com or (914) 517-5000. 

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