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

Ten doctors, nurses, and staffers in South Florida recently pleaded guilty in a $25 million Medicare fraud conspiracy involving home health and therapy services. They are the latest of approximately 50 defendants convicted since federal prosecutors launched an investigation into the Miami-based scam in 2009.

The scam allegedly involved two Miami home health care agencies, ABC Home Health Inc. and Florida Home Health Providers Inc. The agencies claimed that they were providing home health and therapy services to housebound patients, including diabetics who supposedly were unable to inject themselves with insulin. But according to the Justice Department, the agencies falsified patient records so they could bill Medicare for services that the patients did not need and were not entitled to receive. 

For example, the defendant nurses created bogus patient files, falsely reporting that patients had symptoms including “tremors, impaired vision, weak grip, and inability to walk without assistance.” The point of the deceit was to make it seem that the patients were homebound and thus qualified for home health care benefits under Medicare.

The Justice Department announced that nine of the ten defendants admitted recruiting Medicare beneficiaries who allowed the two agencies to bill Medicare for services that were medically unnecessary and/or were never provided. The defendants pleaded guilty on September 20 and 21 to one count each of conspiracy to commit health care fraud, which carries a maximum 10-year prison sentence.

Since March 2007, the government has charged more than 1,140 people in nine locations nationwide with falsely billing the Medicare program more than $2.9 billion.

If you have information about these or any other health care providers who are defrauding any third-party payor, including Medicare, Medicaid or any private payor, we would like to discuss with you legal action to put an end to 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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In the largest civil fraud recovery ever by the U.S. Attorney’s Office for the Eastern District of Tennessee, medical equipment supplier Hill-Rom agreed to pay $41.8 million to settle a Medicare fraud lawsuit brought by two Tennessee whistle-blowers in April 2005.

Based on the accounts of two Hill-Rom employees, the complaint alleged that Hill-Rom knowingly submitted false claims to Medicare from 1999 to 2007 for bed support surfaces for the treatment of pressure ulcers or bed sores. Hill-Rom filed those claims for patients who no longer qualified for Medicare, including patients who had died or were no longer using the equipment. An internal audit performed by Hill-Rom in 2003 alerted Hill-Rom to the fact that medical necessity could not be verified in 65 out of 99 cases reviewed, but Hill-Rom did nothing to correct the problem. Indeed, it was alleged that Hill-Rom continued to bill Medicare for the same patients for long periods of time without making any reasonable effort to determine whether those patients continued to qualify for Medicare.

The $48.1 million settlement compensates the Medicare trust fund for the amounts Hill-Rom claimed, received and paid from 1999 through 2007. Based on the charges against Hill-Rom, the $41.8 million settlement amount is only a fraction of the actual amount Hill-Rom over billed Medicare. The settlement also included a five-year Corporate Integrity Agreement between Hill-Rom and the U.S. Department of Health and Human Services, Office of the Inspector General to ensure future compliance with federal health care benefit program requirements. 

This case was brought under the False Claims Act as a “whistle-blower” lawsuit. Under the False Claims Act, those who knowingly submit, or cause another person or entity to submit, false claims for payment of government funds are liable for three times the government’s damages plus civil penalties of $5,500-$11,000 per false claim. The Act also includes a “whistle-blower” provision which allows citizens with evidence of fraud against government contracts to sue, on behalf of the government, in order to recover the stolen funds. In compensation for the risk and effort of bringing such an action, the whistle-blower may be awarded a portion of the funds recovered, typically between 15% and 25%. The two Hill-Rom whistle-blowers will share an award of $8.36 million from the proceeds of the settlement.

If you are employed by a company that you believe may be filing false Medicare claims for medical equipment or other services and you want to play a role in putting an end to such Medicare fraud, please contact us immediately to discuss your legal options.

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Senior Citizens are routinely targeted for fraud often because they have a “nest egg,” own their home, and/or have excellent credit—all of which make them attractive to con artists.  Unfortunately, older Americans are less likely to report a fraud because they don't know who to report it to, are too ashamed at having been scammed, or don’t know they have been scammed. Fraudsters know the effects of age on memory, and they are counting on elderly victims not being able to supply enough detailed information to investigators.  Additionally, a victims' realization that they were swindled may take weeks, or even months, after contact with the con artist making it even more difficult to remember details from the event.

Senior Citizens are particularly susceptible to Health Care Fraud or Health Insurance Fraud.  These types of fraud can be highly lucrative to fraudsters and devastating to an elderly victim.  Some examples include:

Medical Equipment Fraud:  Equipment manufacturers offer “free” products to individuals.  Insurers are then charged for products that were not needed and/or may not have been delivered.

"Rolling Lab" Schemes:  Unnecessary and sometimes fake tests are given to individuals at health clubs, retirement homes, or shopping malls and billed to insurance companies or Medicare.

Services Not Performed:  Customers or providers bill insurers for services never rendered by changing bills or submitting fake ones.

Medicare Fraud:  Medicare fraud can take the form of any of the health insurance frauds described above.  Senior citizens are frequent targets of Medicare schemes, especially by medical equipment manufacturers who offer seniors free medical products in exchange for their Medicare numbers. Because a physician has to sign a form certifying that equipment or testing is needed before Medicare pays for it, con artists fake signatures or bribe corrupt doctors to sign the forms.  Once a signature is in place, the manufacturers bill Medicare for merchandise or service that was not needed or was not ordered.

The following tips may prove useful in avoiding Health Care Fraud or Health Insurance Fraud:

■          Never sign blank insurance claim forms.

■          Never give blanket authorization to a medical provider to bill for services rendered.

■          Ask your medical providers what they will charge and what you will be expected to pay out-of-pocket.

■          Carefully review your insurer's explanation of the benefits statement.  Call your insurer and provider if you have questions.

■          Do not do business with door-to-door or telephone salespeople who tell you that services of medical equipment are free.

■          Give your insurance/Medicare identification only to those who have provided you with medical services.

■          Keep accurate records of all health care appointments.

■          Know if your physician ordered equipment for you.

These tips are good “rules of thumb” to aid in protecting yourself or those you know against fraud.  However, con artists are constantly working to create new scams which prey on elderly victims.  If you or someone you know has been a victim of Health Care Fraud or Health Insurance Fraud, please contact us to discuss your legal options.  

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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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