Class Action Blog : Class Action Lawyer & Attorney : Meiselman, Denlea, Packman, Carton & Eberz : Consumer fraud, Personal Injury

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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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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