Whistleblower Qui Tam Lawyer Blog
Published on:

weblowerbox_DSC2929jpg The United States Department of Agriculture (USDA) spends more than $1.5 billion annually to fund the National School Lunch Program.   The USDA enters into contracts with thousands of vendors to purchase food products ranging from vegetables to fresh meats.  The USDA then distributes this food to recipient state agencies, that is, individual states that participate in the National School Lunch Program. The individual states then distribute food to local school districts and eventually to schoolchildren.

Unfortunately, many large food vendors defraud the USDA by delivering non-conforming food products, that is to say, food that has been prepared, handled or processed in a way that does not conform to government specifications.

One area of concern deals with the ethical treatment and slaughter of livestock.   Since 2000, the USDA has commonly included in its contracts with food vendors certain requirements dealing with the ethical treatment and slaughter of livestock.  As an example, meat processors may not slaughter non-ambulatory or disabled animals – so-called “downer cows.”  In extreme examples, slaughterhouses have been known to drag disabled animals with chains and/or move them with forklifts into the slaughter facility.

This type of conduct violates federal regulations and federal contracting guidelines.   Other violations include the excessive use of electric shock or “hot shots” to move animals, and schemes to evade USDA inspections.

Meat processing facilities and other contractors who knowingly and deliberately violate federal regulations and contract specifications defraud the government and expose themselves to liability under the False Claims Act.

In 2007, the Humane Society of the United States conducted an undercover investigation of several large meat processors and discovered numerous violations of contract specifications and government regulations.   This led to a successful qui tam case, U.S. ex rel Humane Society of the United States v. Hallmark Meatpacking Co., Case No. 08 – 00221 (Central District of  California).

The Hallmark case provides important precedent for the success of future qui tam whistleblower cases based upon the unethical treatment of animals or other fraud against the USDA.

If you believe your employer is committing a fraud against the government, you should act quickly to learn your rights from a knowledgeable qui tam whistleblower lawyer.   Feel free to contact our firm toll-free for a confidential and free evaluation of your case at (877) 915-4040.  We have assisted whistleblowers in recovering millions of dollars from companies who have cheated the government.

Published on:

You work for a company that is committing a major fraud against the Government. Maybe it’s Medicare fraud, government contracting fraud, or education fraud.   Most of the people in your workplace know the fraud is happening, but nobody is doing anything about it because the company is making so much money.  You know it’s not right.

What should you do?

We recommend you take the first step of calling a knowledgeable qui tam whistleblower attorney to learn your rights and help you decide what to do.  Ultimately, you may decide to do nothing.

But here are the risks you face if you wait too long to take the first step:

First, you may not be the only person in your workplace who knows about the fraud, and you may not be the only person who is thinking of contacting a whistleblower lawyer.  The federal False Claims Act imposes a “first to file” rule.   The rule is designed to encourage people to come forward with information as soon as possible.   In the real world, this means the first-filed case usually bars later-filed cases.

Suppose two whistleblowers know the exact same information.  One whistleblower files a suit on Monday, and the second whistleblower files a suit on Tuesday.  Unfortunately, the Tuesday whistleblower might be out of luck.

Second, your company might already be under investigation by the Government.  In some circumstances, a whistleblower can file a qui tam case even though the company is already under investigation, provided the whistleblower brings new or important information to the table.  But if the whistleblower waits so long that the Government has already filed a pending civil, criminal, or administrative action, the whistleblower may be out of luck.   The pending government case will probably bar the whistleblower claim.

Finally, even if there are no other whistleblowers and the Government has not yet filed anything, most whistleblower laws impose a statute of limitations which works as a time limit for bringing whistleblower claims.  The federal False Claims Act imposes a six-year time limit for bringing claims. This means that, generally, the whistleblower can only complain about activity that has taken place six years prior to the date he or she files the whistleblower complaint.

In summary, if you believe your employer is committing a fraud against the government, you should act quickly to learn your rights from a knowledgeable qui tam whistleblower lawyer.

Call us toll-free at 877-915-4040 for a confidential and free evaluation of your case.  We have assisted whistleblowers in recovering millions of dollars from companies who have cheated the Government.

Published on:

In an opinion by Judge Richard Posner, the Seventh Circuit recently had an opportunity to revisit the pre-2010 version of the public disclosure bar found in 31 U.S.C. § 3730(e)(4).  In United States ex rel. Bogina v. Medline Industries, Inc., No. 15-1867 (7th Cir. Jan. 4, 2016), the court considered the dismissal of a 2011 qui tam complaint filed against Medline Industries, Inc., a “major seller of medical equipment to institutions reimbursed by Medicare,”  and Tutera Group, a “chain of nursing homes that is a Medline customer.”  The relator alleged that Medline paid bribes and kickbacks to the Tutera Group to induce additional purchases.

The case hinged on application of the public disclosure bar, due to earlier lawsuits against Medline based on the same conduct.  As the conduct at issue occurred from 2003 to 2009, the court applied the pre-2010 version of the public disclosure bar.  (In Graham County Soil & Water Conservation Dist. v. U.S. ex rel. Wilson, 559 U.S. 280 (2010), the Supreme Court held that the 2010 amendment to § 3730(e)(4) is not retroactive.)  That version of the statute barred a qui tam suit “based upon public allegations” unless the relator was “an original source of the information.”  In 2010, the statute was amended to bar a qui tam suit where “substantially the same allegations or transactions as alleged in the action or claim were publicly disclosed,” unless the relator was an “original source.”  The amendment also changed the definition of original source.  Previously, an “original source” was an “individual who has direct and independent knowledge of the information.”  The new statute defined an original source as an individual with “knowledge that is independent of and materially adds to the publicly disclosed allegations.”

In his opinion, Judge Posner described the pre-2010 definition of “original source” as “inscrutable” and difficult to apply.  His opinion also concluded that the new definition is only a clarification, rather than a change, to the meaning of the term “original source.”

Thus, he held that “because the earlier definition is inscrutable as well as skimpier than the current one, the current one should be deemed authoritative regardless of when a person claiming to be an original source acquired his knowledge.”  In other words, because the amendment to the “original source” definition “is a clarifying rather than a substantive amendment, it is not subject to a retroactivity bar.”

This part of the holding is important, as it means that courts and litigants no longer have to wrestle with the question of what it means to have “direct” and “independent” knowledge – questions that have vexed lawyers for years.

Returning to the facts of the case, the court concluded that the suit was barred by the public disclosure bar.  Because the prior lawsuit against Medline also accused it of paying kickbacks, the court concluded that the new lawsuit did not “materially add” to the allegations raised in the first lawsuit.  The only material difference between the new complaint and the prior complaint was the addition of the Tutera Group, which the court deemed immaterial.


Published on:

Ambulance fraud is on the rise in Florida, and taxpayers are paying the bill.   In September 2015, the Department of Health and Human Services, Office of Inspector General (“OIG”) issued a report titled Inappropriate Payments and Questionable Billing for Medicare Part B Ambulance Transports.   In May 2015, the United States Attorney for the Middle District of Florida also reached a $7.5 million settlement with several Jacksonville-area health facilities and an ambulance provider for various ambulance fraud schemes.

Here’s the issue.  Medicare pays for non-emergency ambulance transportation for Medicare beneficiaries when other means of transportation would endanger the person’s health.  The transportation must be for medical purposes, like attending a doctor’s appointment, not for grocery shopping.  As an example, an elderly Medicare beneficiary may need non-emergency ambulance transportation to receive kidney dialysis treatment.  To justify the transportation, however, the ambulance ride must be “medically necessary.”  The person must not be able to drive himself or herself, take a bus, or arrange other transportation, without endangering his or her health.

Unfortunately, dishonest ambulance companies and healthcare providers often bilk taxpayers for bogus ambulance services.   Sometimes, Medicare beneficiaries themselves are complicit with the fraud, treating the ambulance ride as a free taxi service (at the taxpayers’ expense).

Here are some common fraud schemes involving ambulance transportation:

·         Providing ambulance transportation to Medicare beneficiaries who do not need it.  In many cases, the Medicare beneficiaries are perfectly capable of driving themselves. In extreme cases, the beneficiary even rides in the passenger seat of the ambulance!

·         Providing ambulance transportation without adequate personnel.   To bill Medicare for an ambulance ride, the company must have properly trained people on board.   Often, this is not the case.

 ·         Up-coding ambulance transportation from “basic life support” to “advanced life support,” which is more expensive.

 ·          Providing service without an ambulance.   Because many of these bogus rides are nothing more than an expensive taxi, some ambulance companies don’t even bother to use a real ambulance and instead substitute cargo vans.  This is an extreme example of fraud – billing for an ambulance without a real ambulance.

·         Paying kickbacks in exchange for ambulance referrals.   Many times, hospitals, nursing homes, and skilled nursing facilities arrange for ambulance transportation for Medicare beneficiaries.   Generally, these facilities must issue a Certificate of Medical Necessity to attest that the ambulance transports are really necessary.   Dishonest ambulance companies will pay kickbacks to these facilities in exchange for bogus certificates, which open the way for fraudulent billing.

With its large elderly population, Florida is vulnerable to this type of fraud against the taxpayers.   Large metropolitan areas like Orlando, Tampa, Miami, and Fort Lauderdale are especially vulnerable.   If you know about a healthcare provider that engages in this type of deceptive practice, you may be able to bring a qui tam whistleblower case.   Contact our attorneys for a free consultation.

Ambulance Fraud Florida | Whistleblower Case Palm Beach

Published on:

Senior Medicare Patrols (“SMP”) provide free assistance to Medicare beneficiaries, their families, and caregivers to prevent, detect, and report Medicare fraud. SMP’s are funded with grants from the U.S. Department of Health and Human Services, U.S. Administration for Community Living.  There is an SMP office in each of the 50 states, Washington, D.C., Puerto Rico, Guam, and the U.S. Virgin Islands.

SMP conducts educational outreach programs for Medicare beneficiaries, engages volunteers who work directly with Medicare beneficiaries, and reviews complaints from Medicare beneficiaries.  SMP refers any cases of suspected fraud or abuse to state and/or federal agencies for investigation.

One of the things SMP strives to educate Medicare beneficiaries and their caregivers about is how to review Medicare Summary Notices (MSNs) and Explanations of Benefits (EOBs) to identify inaccuracies, which may be indicators of fraud. MSNs and EOBs show the services the health care provider billed Medicare for, the amount paid by Medicare, and the amount of any co-payment due from the beneficiary.  An SMP video tutorial explaining the basics of how to read MSNs can be found here.

SMP encourages Medicare beneficiaries to keep a written record of all medical services, tests, and equipment they receive, along with receipts for any co-payments they paid.  Local SMP offices provide Personal Health Care Journals that are useful to record this information.

A comparison of the MSNs and EOBs to the beneficiaries’ own written record of his/her doctor visits, tests, services, and medical equipment received should reveal any inconsistencies, such as services the provider billed for but never provided to the patient, duplicate billing for the same service, or reflecting that a co-payment was paid when the patient was never asked to make a co-payment.

Inconsistencies should be brought to the attention of the health care provider so that errors can be ruled out. Beneficiaries not satisfied with the provider’s response, however, or who are uncomfortable contacting the provider directly, should contact their local SMP office for help.  SMP can then assist in determining if it was an error or possibly healthcare fraud.  If SMP suspects that it may be fraud, SMP will refer it to the appropriate agency for investigation –  the Centers for Medicare and Medicaid Services, State Medicaid Fraud Control Unit, local law enforcement, the state attorney general, or others.

Medicare beneficiaries and their caregivers can reach the SMP by calling its nationwide toll-free number: (877) 808-2468 or by clicking here to use the online Locator to locate their closest SMP office.




Published on:

Qui Tam Settlement | West Palm Beach False Claims Act

McCabe Rabin, P.A. announces the settlement of a nationwide qui tam case against pharmaceutical giant Endo Pharmaceuticals Inc., and several of its subsidiaries, arising from the sale of under-strength multivitamins with fluoride.  Under the settlement, the federal government and the Medicaid programs of 26 states will share in a $39 million recovery.

McCabe Rabin, P.A. represented Dr. Stephen Porter, a Florida dentist, who discovered that one of the major brands of chewable fluoride multivitamins on the market, Qualitest, contained less than half the labeled dosage of fluoride.  These products are commonly prescribed by doctors and pediatricians to children who live in areas without fluoridated water.  The American Dental Association and the American Academy of Pediatrics recommend that all children under the age of 16 who live in communities without fluoridated water take daily fluoride supplements.

The law firm filed a qui tam lawsuit in the Southern District of New York in 2013 under the False Claims Act seeking to recover the millions spent for these half-potent drugs by federal and state healthcare programs.

Firm partner Ryon McCabe praises Dr. Porter for his hard work and fortitude throughout the course of the investigation. “The most important thing to Dr. Porter was to remove the defective product from circulation, which this lawsuit accomplished,” said McCabe.  The settlement also returns millions to the taxpayers.

McCabe thanks Assistant United State Attorney Li Yu of the Southern District of New York, as well as Jay Speers, Counsel to the National Association of Medicaid Fraud Control Unit, who worked tirelessly with Dr. Porter to bring this case to settlement.

The lawsuit is titled U.S. ex rel Porter v. Endo Pharmaceuticals, et al, 13-Civ-1506, United States District Court, Southern District of New York.

The Department of Justice Press Release can be found by clicking here.

If you know about fraud against government healthcare programs, contact one of our lawyers for a free consultation.

Published on:

Triple Canopy Case | West Palm Beach False Claims Act

The U.S. Supreme Court will consider Triple Canopy, Inc.’s petition for a writ of certiorari this week for review of the Fourth Circuit’s decision in U.S. ex rel. Badr v. Triple Canopy, Inc.  The case that wades into the thorny issue of “implied certifications.”

In Triple Canopy, the federal government awarded a fixed price contract to Triple Canopy to provide security services at an airbase in Iraq.  The “task order” setting forth Triple Canopy’s requirements in fulfilling the contract required that each guard hired pass a marksmanship test.  Neither the “task order” nor any other document conditioned payment on passing the marksmanship test.

Triple Canopy hired 332 Ugandan guards to deploy at Al Asad Airbase for which it was providing security.  When the guards arrived in Iraq, Triple Canopy’s supervisors discovered that none of the guards could pass the marksmanship test.  Nonplussed, Triple Canopy continued to use the guards to provide security.  To cover their tracks, Triple Canopy’s employees created fake documentation showing passing scores for each of the Ugandan guards.  Over a one year period, Triple Canopy submitted over $4 million in invoices for providing services at Al Asad, and the contract was not renewed.

Omar Badr, a Triple Canopy employee, brought a qui tam action against Triple Canopy, and the government intervened.  (Badr also brought claims related to other airbases, but these were dismissed under Rule 9(b).)  The district court dismissed the government’s complaint, finding that the government did not plead a demand for payment with an objectively false statement.

The Fourth Circuit reversed.  The court noted that a claim may be false when it “impliedly certifies compliance with a material contractual condition.”  Thus, the court held, “the Government pleads a false claim when it alleges that the contractor, with the requisite scienter, made a request for payment under a contract and ‘withheld information about its noncompliance with material contractual requirements.’”   Because the government pled sufficient facts showing materiality, including but not limited to the allegation that Triple Canopy created fake scorecards for the Ugandan guards, the government’s claims must be reinstated.

The court rejected the prevailing view in other circuit courts that an implied certification gives rise to liability only when the contractual (or statutory) requirement is an express condition of payment.  This view, originating in the Second Circuit’s opinion in Mikes v. Straus, 274 F.3d 687 (2d Cir. 2001), has been adopted by the Second, Third, Fifth, Sixth, Ninth, and Tenth Circuits.  Only the First Circuit and D.C. Circuit (and now the Fourth Circuit) have adopted the looser “materiality” standard.

In petitioning for a writ of certiorari, Triple Canopy is challenging the minority view of an “implied certification,” in other words, the idea that knowing noncompliance with a “material” contractual term is sufficient for a False Claims Act violation.  Specifically, Triple Canopy seeks review of the circuit split and endorsement of the majority view that an “implied certification” is actionable only when a defendant fails to comply with an express condition of payment set forth in a statute, regulation, or contract.

More fundamentally, Triple Canopy is asking the Court to review “the underlying legitimacy of the implied certification theory of liability itself.”   If the Court were to find that “implied certifications” were not actionable false claims, it could significantly hamper the government’s ability to police Medicare and Medicaid fraud.  Many “false claims” in the healthcare context are “implied certifications.”  For instance, a Medicare claim submitted by a provider in violation of the Anti-Kickback Statute is premised on the “implied certification” that the claim complies with that statute.  With these claims, the claim itself is facially truthful (i.e., the service billed was actually rendered), but the claim was a product of an illicit kickback.  If Triple Canopy’s argument were successful before the Supreme Court, such violations of the Anti-Kickback Statute would be extremely difficult to prove.

Published on:

The University of Florida in Gainesville (the “University”) has settled with the U.S. Department of Justice (DOJ) for claims that the University improperly charged the U.S. Department of Health and Human Services (HHS) for unapproved salaries and administrative costs on hundreds of federal grants the University run hospital system received from HHS.

HHS considers its grants valuable commodities that must be used strictly for the medical research and clinical programs in which HHS has approved funding.  Here, according to allegations, the University was knowingly diverting the grant monies to fund salaries and administrative costs that were not approved in the grants awarded to the University’s hospital system.

DOJ alleged that between 2005 and 2010, the University did not have sufficient internal controls that would promote transparency and accountability as to how the grant monies would be used.  DOJ’s allegations included charges that the University overcharged hundreds of grants for the salaries of its employees, where it did not have documentation to support the level of effort claimed on the grants for those employees.  DOJ further contended that the University charged some of these grants for administrative costs for equipment and supplies when those items should not have been directly charged to the grants under federal regulations.

In response to the news about the settlement, University officials have stated that the University has received nearly 1,900 grants from HHS with funding totaling nearly a billion dollars.  The University officials minimized that the $19.875 million represented only 2% of the HHS grants to the University.  Yet, according to federal databases, the University has received $335.7 million from HHS during the 2005-2010 period, making the settlement represent about 6 percent of funds received.

University officials now acknowledge that the University first discovered the “weaknesses in the system” during an internal audit in 2006 and a “shortcoming” was an “area of focus” during a routine federal audit of the [U]niversity’s fiscal 2008 federal grants.

In response to the publicity about the settlement, the University has emphasized that none of the settlement funds will come from tuition or state or tax-payer-provided funds.


Published on:

West Palm Beach False Claims Act | Medicare Fraud

We have blogged in the past about a common Medicare fraud scheme that involves waiving patient copayments and deductibles.   The basic scheme works like this.   Medicare normally requires that healthcare providers collect a copayment equal to 20% of the covered item or service.    Crooked healthcare providers will waive or forgive this 20% copay as a form of hidden kickback to the patient.  “Come to me, and I won’t charge you any copay.”

The government has been wise to this fraud for many years.   Indeed, HHS-OIG warned about this fraud as early as 1994.   Publication of OIG Special Fraud Alerts, 59 Fed. Reg. 65372, 65374 (Dec. 19, 1994).  For that reason, many fraudsters know that the excessive waiver of copays will raise a red flag with insurance company and government auditors.

Fraudsters — ever clever in their schemes to hide and conceal their frauds — have come up with new ways to hide this scheme.  Some fraudsters have taken to “collecting” the copays by means of prepaid credit cards, the kind that can be commonly purchased at any local Walmart or grocery store.   These prepaid credit cards are largely untraceable and, most important for the fraudsters, provide a seemingly valid debit card number that can be inserted into its books and records as the source of the alleged “payment” for the copay or deductible.

This bit of deception satisfies two aims.  First, it relieves any burden from the patient to satisfy the copay.  This allows the fraudster to continue to commit the fraud without any complaint by the patient, who has never been asked to pay for anything.

Second, it provides a reasonably good “CYA” trail in case the government or investigators examine the record of copay collections. With this scam, the copay was not “waived” at all on the books and records.  Instead, it was fully “collected” with a seemingly valid credit card receipt.   Little do auditors know that the credit card at issue was purchased by the fraudster.

The only way to catch this scheme would be for an inside whistleblower to come forward and report it to the government, or for auditors to stumble upon the odd coincidence that multiple patients are paying their copays using the same credit card!

Schemes like this are the reason taxpayers continue to lose billions every year to healthcare fraud.  The government simply cannot catch all of the fraud on its own and relies upon honest employees who are willing to come forward to report the frauds of their employers.

If you know about a healthcare provider that engages in this type of deceptive practice, you may be able to bring a qui tam whistleblower case.   Contact our attorneys for a free consultation.

Published on:

West Palm Beach False Claims Act | Medicare Fraud

The U.S. Department of Health and Human Services Office of Inspector General (OIG) recently released a detailed study of ambulance transports billed to Medicare Part B in the first half of 2012 that identified millions of dollars of dubious and potentially fraudulent payments.  Of the $2.86 billion paid by Medicare for ambulance services in those six months, the September report stated that $207.5 million went toward transports associated with questionable billing practices.

At least $30 million of the improper payments were for ambulance rides where the OIG could find no record of the patient ever receiving any kind of medical care – the so-called “mystery rides.” Another $24 million was paid for transports to destinations not covered by Medicare.  The study also determined that more than 1 in 5 ambulance suppliers implemented questionable billing practices.  A copy of the full OIG report can be found here.

Medicare only covers ambulance transports when a patient’s medical condition at the time of transport is such that other means of transportation would endanger the patient’s health. Additionally, the transport must be to receive or return from a medically necessary Medicare service.  If an ambulance transport fails to meet these criteria, it is not billable to Medicare.  Knowingly billing the federal government for fraudulent medical services constitutes a violation of the False Claims Act.

Among the most common kinds of ambulance fraud and false Medicare claims are the following:

  • Billing for medically unnecessary dialysis transportation;
  • Billing for transportation to routine medical appointments, such as radiology or radiation treatment;
  • Billing for a higher level of service than was actually provided, such as coding a basic life support transport as one for advanced life support, which is reimbursed at a much higher rate;
  • Charging for supplies or services that were not actually rendered, such as oxygen and cardiac monitoring; and
  • Entering into agreements with facilities like hospitals and nursing homes where the ambulance company provides reduced-cost transports in exchange for transport referrals, in violation of the Anti-Kickback Statute.

If you have knowledge of any of the above schemes or other fraud in connection with ambulance transports, contact our attorneys for a free consultation at (877) 915-4040.