Whistleblower Qui Tam Lawyer Blog
Published on:

Broadly speaking, “off-label” drug use occurs when a doctor prescribes a medication for a condition or ailment that is not specifically approved by the FDA.  When the FDA approves a drug, the manufacturer is required to submit studies showing that a drug works for a specific condition and that it is safe.  Sometimes, however, a drug is shown to have beneficial effects on a condition, but the FDA will not approve the drug for that specific use.  For instance, I take a drug for migraine headaches that has only officially been approved for treatment of clinical depression.  This is considered “off-label” use.

No law prevents a physician from writing a prescription for an off-label use, and private insurance companies (my own included) frequently pay for drugs even when used for an “off-label” purpose.  Nevertheless, “off-label” drug use presents the potential for fraud.  Drug companies are barred by the FDA from marketing a drug for off-label use – for obvious safety reasons.

This rule, however, has not stopped the deep-pocketed pharmaceutical companies from trying to find back door methods to promote their drugs for off-label uses, in order to increase their bottom line.  A few years ago, GlaxoSmithKline paid over $1 billion to settle False Claims Act allegations regarding its illicit marketing of drugs, including Paxil and Wellbutrin, for off-label uses.  Among other problems, the government found that GlaxoSmithKline had been paying kickbacks to doctors in exchange for prescribing the drugs for off-label purposes.  (The total settlement was over $3 billion, but only about one-third was related to off-label marketing.)

Published on:

As we wrote back in April, the Supreme Court considered a case this term on a grey area in False Claims Act litigation – “implied certifications.”  A typical false claim would be “factually false” – in other words, the fraudster submits a claim to the government that is actually false.  For instance, if a government contractor submits an invoice to the government for 10 tons of potatoes but only supplies 5 tons, the invoice is “factually false.”

An “implied certification” involves a claim for payment where a defendant did not expressly certify a fact, but the act of submitting the claim “implies” that certain facts are true.  For instance, submitting a claim for payment to Medicare has been deemed an implied certification of compliance with the Anti-Kickback Statute and the Stark Law.  Thus, a claim that is submitted to Medicare for services that resulted from the payment of a kickback is “impliedly false.”  Likewise, if a contractor fulfills a contract to provide guns to the military, but the guns do not shoot, that could be an “impliedly false” claim – the guns were in fact provided, but the contractor did not comply with the terms of the contract that require the guns to work.

Prior to yesterday’s decision in United Health Services, Inc. v. United States and Massachusetts ex rel. Julio Escobar and Carmen Correa, the courts of appeals had split on several questions, including (a) whether impliedly false claims were actionable, and (b) whether the fraudster must violate a specific “condition of payment” to render a claim impliedly false.  In that case, a mental health facility was using unlicensed, unsupervised counselors to offer psychological counseling to patients.  Moreover, many of the counselors lied about their credentials and licensure in order to get Medicaid provider numbers, in order to bill the federal government.

Published on:

Many healthcare companies engage independent sales representatives or marketers to sell their goods and services.   These include pharmaceutical companies, diagnostic laboratories, home health agencies, imaging centers and many others.

Unfortunately, many of these companies violate the Anti-Kickback Statute (AKS) and the False Claims Act through the manner in which they pay these sales people.  In general, sales people can be engaged and paid in one of two ways:  (1) as W-2 employees, or (2) as 1099 independent contractors.  W-2 employees require greater supervision on the part of the employer, whereas independent contractors do not.  Also, employers must withhold taxes and pay payroll taxes for W-2 employees, which is not the case for 1099 independent contractors.

Many companies run afoul of the Anti-Kickback Statute because they engage 1099 sales people and pay them based on an “eat what you kill” formula tied to volume of sales.  Obviously, this encourages the sales people to sell as much as possible, posing a danger of over-utilization to the healthcare system.

Published on:

In the world of healthcare, federal law makes it illegal to offer or receive a kickback in exchange for referring or arranging for the furnishing of any item or service that will be covered by a federal healthcare program.   The Anti-kickback Statute can be found at 42 U.S.C. 1320a–7B.

But what is a kickback?  The statute makes it illegal to “solicit or receive any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in-kind.”  This means a kickback can be any type of remuneration, benefit or compensation, whether direct or indirect, hidden or secret.

The anti-kickback statute has two overarching purposes.

Published on:

Unfortunately, many hospitals commit fraud against the federal government in the way they pay doctors and physicians.

To understand this type of fraud, you have to understand how hospitals bill the Medicare system.  Generally, bills can be divided into two categories.  First, the hospital bills Medicare for work personally performed by the doctor, for example, a patient visit.  Second, the hospital bills Medicare for all the tests and services the doctor orders, but does not personally perform.  These might include x-rays, MRI tests, laboratory tests, physical therapy, or radiation therapy.

Hospitals make way more money from tests and services ordered by the doctor than from work actually performed by the doctor.  Obviously, then, the hospital has a financial incentive to encourage the doctor to refer more of these tests and services.  More tests equals more money.

Published on:

The Government Accountability Office recently released a report finding that Medicare paid out $14.1 billion to private insurance companies for improper claims in 2013 alone.  The report, entitled “Medicare Advantage:  Fundamental Improvements Needed in CMS’s Effort to Recover Substantial Amounts of Improper Payments,” discusses audits conducted by the Centers for Medicare and Medicaid Services on payments to select “Medicare Advantage” plans.

Medicare Advantage plans are private health plans available to senior citizens who qualify for both Medicare Part A and Part B.  In lieu of “traditional” Medicare, one can enroll in a Medicare Advantage plan managed by a private insurance company.  CMS then pays the private insurer a fixed monthly sum per person enrolled to provide care, regardless of the actual healthcare expenses incurred by the patient.  Put another way, rather than pay health care expenses as they are incurred, CMS pays a fixed “premium” every month to the private insurers, who then fund a senior’s health care expenses as they come due.

Medicare Advantage plans are big business for private insurance companies.  In 2014 alone, CMS paid roughly $160 billion to private insurers offering Medicare Advantage plans to 15.8 million seniors.  In total, about 30% of Medicare recipients have elected to enroll in Medicare Advantage plans.

Published on:

South Florida is ground zero for Medicare fraud.  Again.

This time it’s Medicare Part D fraudMedicare Part D went into effect in 2006 as a means of providing prescription drug coverage to Medicare beneficiaries.   Medicare Part D works as follows.  Private insurance companies agree to become Part D drug plan sponsors.   Medicare beneficiaries then become insureds with the private company.  When a beneficiary needs a prescription drug, he or she obtains the drug through a pharmacy in the normal way, with the insurance company paying the bill.  The Government then reimburses the insurance company through a complicated formula.

According to the Department of Justice, Medicare Part D is the fastest growing area of the Medicare program.   Last year, the Government spent more than $120 billion on Medicare Part D coverage.   The Government estimates that as much as $10 billion of last year’s expenditures were fraudulent.

Published on:

According to the Centers for Medicare and Medicaid Services, as of February 2016, there were over 56,000,000 beneficiaries enrolled in the original Medicare and Medicare Advantage plans.  Given the number of patients, just imagine how many Medicare claims are submitted every day.  It’s no wonder the Medicare system is a target for fraud.  With the volume of legitimate Medicare claims that are submitted, surely the government won’t notice a few thousand fraudulent ones thrown in to the mix, right?  With help from whistleblowers, those fraudsters can be stopped and taxpayer dollars can be recovered.  The False Claims Act permits whistleblowers to bring qui tam actions for fraud committed against the government.  Qui tam whistleblowers may be entitled to a percentage of the government’s recovery.

If you are employed in the healthcare field – a doctor, dentist, nurse, therapist, medical biller, receptionist, aide, technician, patient advocate, etc. – would you know Medicare fraud if you saw it?  Some Medicare fraud schemes are easy to spot– billing for patients that don’t exist using stolen Medicare numbers; billing Medicare for durable medical equipment that was never provided to the patient – others are not so obvious.  Here are some other examples of Medicare fraud that aren’t always so easy to identify.

  • Billing separately for items that should be bundled and submitted under a single billing code;
Published on:

On Tuesday, April 19, the Supreme Court heard oral argument in Universal Health Services v. United States and Massachusetts ex rel. Julio Escobar and Carmen Correa, a case testing the “implied certification” theory used in many False Claims Act cases.

Implied certification” is a tricky concept developed by the federal courts under the False Claims Act (FCA).  It stems from what is known as a “false certification.”  A false certification is a request for payment from the government by a defendant, who submits a document expressly certifying compliance with a contract, regulation, or statute, but who in fact did not comply.  An “implied certification” involves a claim for payment where a defendant did not expressly certify compliance, but the act of submitting the claim “implies” compliance with specific terms or regulations.  For instance, submitting a claim for payment to Medicare has been deemed an implied certification of compliance with the Anti-Kickback Statute and the Stark Law.

The federal courts have disagreed both over whether an “implied certification” can constitute a “false claim” under the FCA, as well as what rules or statutes must be violated.  For instance, some courts of appeals have focused on the materiality of the defendant’s conduct and whether the government would have paid the defendant’s claim, had it known that it was violating a specific contract or statute.  Other courts have found that the defendant must violate a specific statute or contract term upon which payment is conditioned.  In other words, for a defendant to be liable for not doing X, Y, or Z, the contract must state explicitly that the defendant will not be paid if he does not do X, Y, or Z.

Published on:

McCabe Rabin, P.A. announces the settlement of a qui tam case against Florida Pain Medicine Associates, Inc. and its owners Dr. Bart Gatz, Dr. Alexis Renta and Dr. Albert Rodriguez.  Florida Pain Medicine Associates, Inc. is a pain clinic located in Palm Beach County, Florida.

Our law firm, along with co-counsel Bruce Reinhart of McDonald Hopkins, P.A., represented Rosa Gomez, a former pain clinic employee who worked as a receptionist and billing clerk.  In 2013, Ms. Gomez approached McCabe Rabin, P.A. because she believed her employers were defrauding government healthcare programs by performing medically unnecessary procedures.

Under federal law, the Medicare program only pays for services that are “medically necessary.”  A healthcare provider commits fraud by billing the government for unnecessary procedures.