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Tag: healthcare fraud

Pharmaceutical Whistleblowers

September 3, 2020

The pharmaceutical industry develops, produces, and markets drugs to treat disease. The economic impact of the American pharmaceutical industry is vast. In 2018, the United States spent $335 billion on prescription drugs.[1] On average, nearly half of all Americans have taken at least one prescription drug within any 30 day period.[2] Pharmaceutical whistleblowers perform a crucial service on behalf of public health and taxpayers when they report or oppose violations of safety laws and fraud.

The primary law used by pharmaceutical whistleblowers is the False Claims Act. The False Claims Act (FCA) prohibits false or fraudulent records, statements, and/or claims for the purpose of obtaining payment from the federal government. Pharmaceutical whistleblowers often fall under the protections of the FCA because of government involvement through Medicare and/or Medicaid.

Some of the most common ways in which pharmaceutical companies violate the FCA:

    • Kickbacks – the FCA prohibits pharmaceutical companies from paying physicians to recommend specific drugs. The prohibitions are not limited to outright bribes or rebate programs but also include price concessions on one drug in order to induce the purchase of a different drug.
    • Upcoding – the FCA prohibits healthcare providers from submitting bills for unnecessary services. When healthcare providers submit claims for goods or services beyond what is medical necessary, they are “upcoding.”
    • Off-label marketing – the FCA prohibits pharmaceutical companies from marketing drugs beyond the specific use approved by the Food and Drug Administration (FDA). The FDA does not approve a drug for treatment of sickness in general. Instead, a drug is approved for treatment of a specific condition for which the drug has been tested in patients. When a pharmaceutical company markets or promotes a drug beyond its approved use, the company is engaging in “off-label marketing.”

The FCA enables a whistleblower to step into the shoes of the government to sue on its behalf to recover fraudulently obtained funds. Under the False Claims Act, whistleblowers are entitled to 15% to 30% of the money recovered from the lawsuit. In many cases, recovery may be substantial:

    • $3 billion settlement against GlaxoSmithKline in 2012 for kickbacks and upcoding;[3]
    • $2.3 billion settlement against Pfizer in 2009 for kickbacks and off-label promotion;[4] and
    • $2.2 billion settlement against Johnson & Johnson in 2013 for kickbacks and off-label promotion.[5]

In the healthcare industry alone, the Department of Justice recovered over $1 billion under FCA whistleblower lawsuits every year since 2005.[6]

 

[1] NHE Fact Sheet. Centers for Medicare & Medicaid Services (Mar. 24, 2020). Available at https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/NHE-Fact-Sheet#:~:text=Prescription%20drug%20spending%20increased%202.5,the%20households%20(28.4%20percent).

[2] Martin, Crescent et al. Prescription Drug Use in the United States. NCHS Data Brief No. 334. U.S. Dep’t of Health and Human Services (May 2019). Available at https://www.cdc.gov/nchs/data/databriefs/db334-h.pdf.

[3] Thomas, Katie and Schmidt, Michael. Glaxo Agrees to Pay $3 Billion in Fraud Settlement. New York Times (July 2, 2012). Available at https://www.nytimes.com/2012/07/03/business/glaxosmithkline-agrees-to-pay-3-billion-in-fraud-settlement.html.

[4] Gardiner, Harris. Pfizer Pays $2.3 Billion to Settle Marketing Case. New York Times (Sept. 2, 2009). Available at https://www.nytimes.com/2009/09/03/business/03health.html.

[5] Dennis, Brady. Johnson & Johnson Agrees to Pay $2.2 Billion in Drug-Marketing Settlement. Washington Post (Nov. 4, 2013). Available at https://www.washingtonpost.com/national/health-science/johnson-and-johnson-agrees-to-pay-22-billion-in-drug-marketing-settlement/2013/11/04/a7092342-456a-11e3-b6f8-3782ff6cb769_story.html.

[6] U.S. Dep’t of Justice, Fraud Statistics – Overview (2019), U.S. Dep’t of Justice. Available at https://www.justice.gov/opa/press-release/file/1233201/download.  

Whistleblowers for Nursing Home Fraud

August 12, 2020

 

Fraud occurs with surprising frequency in facilities with especially vulnerable patients. For this reason, nursing homes can be easy targets for Medicare and Medicaid fraud. These facilities are not under as much official scrutiny as hospitals. Nursing home residents are often unable to advocate for themselves. It is up to whistleblowers who have insight into this type of wrongdoing to expose it.

Common examples of fraud at nursing homes include:

  • billing for unnecessary tests and procedures;
  • paying kickbacks to doctors for referring patients to the nursing home; and
  • receiving kickbacks, rebates, or other benefits for prescribing drugs or using medical devices.

For-profit nursing home providers have frequently been defendants in whistleblower claims. Recently, nursing homes have settled cases with accusations of Medicare fraud and illegal kickbacks. The whistleblower statutes provide for a percentage of any recovery to go to the whistleblower, even when the government intervenes on the whistleblower’s behalf.

More than a dozen nursing home operators have settled whistleblower lawsuits with the Justice Department in cases with allegations of improper Medicare billing, forged documents, and other abuses. One nursing home provider in Tennessee is still in litigation with the government over accusations of putting residents into unnecessary therapy services and delaying the release of patients in order to reap higher Medicare benefits.[1] A nursing home in California settled a whistleblower lawsuit for $6.9 million for an illegal kickback scheme of tickets to sporting events and yacht excursions for hospital planners that provided patient referrals.[2] One of the largest nursing homes in country settled a whistleblower lawsuit for $145 million to resolve allegations that it engaged in a systematic scheme to maximize Medicare billing.[3]

It is clear healthcare fraud occurs in nursing homes through the United States. The settlements discussed above are just some of the many lawsuits detailing the extent of the fraud. It leads you to wonder if any nursing homes in Virginia could be guilty of the same fraudulent conduct?

 

 

 

[1] Moreno, Edward. Nursing Home Providers Accused of Misusing Federal Dollars Received Millions in COVID-19 Funds: Report. The Hill (Aug. 4, 2020). Available at https://thehill.com/policy/healthcare/510529-nursing-home-providers-accused-of-misusing-federal-dollars-received.

[2] Cenpizer, Debbie. Nursing Home Companies Accused of Misusing Federal Money Received Hundreds of Millions of Dollars in Pandemic Relief. Washington Post (Aug. 4 2020). Available at https://www.washingtonpost.com/business/2020/08/04/nursing-home-companies-accused-misusing-federal-money-received-hundreds-millions-dollars-pandemic-relief/.

[3] Life Care Centers of America Inc. Agrees to Pay $145 Million to Resolve False Claims Act Allegations Relating to the Provision of Medically Unnecessary Rehabilitation Therapy Services. Office of Public Affairs, U.S. Dept. of Justice (Updated Apr. 27, 2017). Available at https://www.justice.gov/opa/pr/life-care-centers-america-inc-agrees-pay-145-million-resolve-false-claims-act-allegations.