Pharmacists allegedly gave doctors rent and office staff in return for patient referrals and medically unnecessary prescriptions. Two New York pharmacists have been arrested and charged with submitting false and fraudulent claims to Medicare and Medicaid for medically unnecessary prescriptions and over-the-counter products that were not actually dispensed. The indictment also charges the pharmacists with paying illegal kickbacks to doctors and patients. The Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving anything of value in exchange for referrals of items or services reimbursable by Medicare, Medicaid, or other federally-funded healthcare programs. The law was enacted to prevent healthcare providers from using financial incentives to encourage unnecessary or inappropriate medical treatment and services, which can lead to fraud and abuse in government healthcare programs. The Anti-Kickback Statute applies to all healthcare providers who participate in federal healthcare programs, including doctors, pharmacists, hospitals, nursing homes, and medical device manufacturers. Kickbacks to Doctors in the Form of Rent and Office Staff The indictment asserts that the two pharmacists conspired with others to pay illegal kickbacks to doctors in the form of rent and office staff in return for medically unnecessary prescriptions filled at their pharmacies. Under the Anti-Kickback Statute, pharmacists are prohibited from offering anything of value to healthcare providers, such as doctors or nurses, in exchange for referrals of patients who need prescription medications. “Anything of value” means what it says and is not limited to money. It also includes free or subsidized rent, office staff, and other non-monetary benefits. While it is possible for doctors and pharmacists to enter into financial arrangements or relationships with one another, any such arrangement or relationship must be based on fair market value and may not be tied to the volume or value of patient referrals. Kickbacks to Patients in the Form of Cash and Gift Certificates According to the indictment, the two pharmacists also conspired with others who gave cash and supermarket gift certificates to Medicare and Medicaid recipients in return for filling prescriptions at their pharmacies. Under the Anti-Kickback Statute, pharmacists and other healthcare providers are prohibited from offering anything of value in exchange for referrals of items or services reimbursable by federal healthcare programs, such as Medicare or Medicaid. There are limited exceptions and safe harbors that allow for certain types of gifts or arrangements that are not considered kickbacks. For example, a pharmacist may give patients gifts of minimal value that are not intended to induce patients to use a particular pharmacy. Gifts that are of nominal value, such as promotional items like pens, notepads, calendars, or other items that are worth less than $15 are generally permissible under the nominal value exception. However, even gifts of nominal value must meet certain conditions to avoid violating the Anti-Kickback Statute. For example, the gift must not be conditioned on the patient’s purchase of a particular medication or service, and the gift must not be given in exchange for the patient’s referral or business. Whistleblower Rewards for Reporting Kickbacks to Doctors and Patients The penalties for violating the Anti-Kickback Statute are severe. In this case, the pharmacists face a maximum penalty of 10 years in prison for conspiracy to commit health care fraud, 20 years in prison for conspiracy to commit money laundering, and five years in prison for conspiracy to pay illegal health care kickbacks and bribes.
Kickbacks, however, are difficult to detect and prove. For that reason, the government pays financial rewards to whistleblowers who help discover and prove kickback schemes designed to defraud Medicare and Medicaid. The rewards range from 15% to 30% of the amount recovered by the government. This often results in whistleblowers earning hundreds of thousands of dollars in rewards, and sometimes millions of dollars in reward money. For example, in this case, the pharmacists are accused of submitting $26 million in false claims to Medicare and Medicaid as a result of the kickback scheme. The potential whistleblower reward, therefore, is between $3.9 million and $7.8 million. If you have evidence of kickbacks being paid to doctors or patients who benefit from Medicare or Medicaid, you should contact an experienced whistleblower lawyer immediately to protect your rights. You may be eligible for a substantial reward and legal protections as a whistleblower. To schedule a free and confidential consultation with an experienced whistleblower lawyer, call us today at (212) 601-2728.
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Every day, the government announces another multi-million dollar Medicare or Medicaid fraud settlement. Today there was not one announcement, but three.
First, a Johnson & Johnson subsidiary agreed to pay $18 million to settle claims that it caused physicians to submit false claims to Medicare by marketing a medical device for use as a drug-delivery device for prescription corticosteroids, when that use was not approved by the FDA. Second, a hospital in South Carolina agreed to pay $17 million to settle claims that it submitted false claims to Medicare and Medicaid, and that it provided financial incentives to doctors for patient referrals. Third, a diagnostic imaging company agreed to pay $3.5 million to settle claims that it billed Medicare and Medicaid for services that were provided without adequate supervision. Three settlements. Almost $40 million. All announced in just one, typical day in the healthcare fraud arena. Why is there so much fraud in Medicare and Medicaid? Because the government cannot find fraud without help from insiders. Medicare and Medicaid receive more than 1 million claims for reimbursement every day. There is no way for the government to know whether each of those one million claims involved services that were medically necessary, or were properly supervised, or were billed using the proper billing code and not a code for a more expensive procedure. That is why the government relies on – and rewards – whistleblowers who come forward with evidence of fraud. In the South Carolina hospital case, for example, the government began its investigation only after a physician who worked for the hospital came forward with evidence of improper billing and financial incentives. Now that doctor will receive a whistleblower reward of between 15% and 25% of the amount recovered – which will be somewhere in the range of $2.5 million and $4.25 million. If you have evidence that a healthcare provider is submitting false claims to Medicare or Medicaid, then you should consult with an experienced whistleblower lawyer immediately to protect your rights. You may be entitled to legal protections and a substantial reward. To schedule a free and confidential consultation with an experienced whistleblower lawyer, call John Howley, Esq. at (212) 601-2728. Do not delay. There are strict time limits and procedural requirements to qualify as a whistleblower. Whistleblowers Are Urgently Needed to Stop this Type of Massive Fraud
The government has charged three individuals with a conspiracy to collect more than $1 Billion from Medicare and Medicaid for services that patients did not require or were not eligible to receive. The three individuals are the owner of more than 30 nursing homes and assisted living facilities, a hospital administrator, and a physician’s assistant. Yes, you read that correctly. Three individuals are accused of stealing more than $1 Billion from Medicare and Medicaid. According to the FBI, the three individuals were the leaders of a complex conspiracy that included filing false claims with the help of other healthcare providers, and an intricate money laundering scheme designed to hide the flow of payments and kickbacks. The indictment charges that Philip Esformes operated a network of more than 30 nursing homes and assisted living facilities that provided services to thousands of patients. Esformes and his co-conspirators allegedly billed Medicare and Medicaid for medically unnecessary services for many of these patients. The co-conspirators are also charged with receiving kickbacks in return for steering residents to other healthcare providers, who provided additional, medically unnecessary services. The kickbacks allegedly were paid in cash or were disguised as payments for leases, services, or charitable donations to avoid discovery. This case illustrates the critical importance of whistleblowers to uncover billions of dollars in healthcare fraud, waste, and abuse. The government receives millions of claims every day for reimbursement from Medicare, Medicaid, and other government healthcare programs. The claims often set forth nothing more than the patient’s and provider’s identifying information, billing and diagnostic codes, an actual or electronic signature, and a request for payment. Without help from a whistleblower on the inside, it is impossible for the government to determine whether the services were medically necessary, whether they were actually provided to the patients, or whether improper kickbacks were exchanged in return for patient referrals. If you have evidence of Medicare or Medicaid fraud, it is your patriotic duty to come forward and stop the fraud. In return, you are entitled to legal protections and a reward of up to 30% of the amount recovered by the government. In Medicare and Medicaid fraud cases, it is not unusual for those rewards to reach millions of dollars. To schedule a free and confidential consultation with an experienced whistleblower lawyer, call John Howley Esq. at (212) 601-2728. Do not delay. There are strict time limits and procedural requirements in order to qualify for a whistleblower reward. William LaCorte, a physician in Louisiana, has earned a $59 million whistleblower reward after Pfizer agreed to pay $784 million to settle allegations of false claims to Medicaid for Protonix, a heartburn medication. The complaint alleged that Pifzer’s subsidiary, Wyeth, failed to pay rebates to Medicaid to account for price discounts that Wyeth had provided to other customers.
Dr. LaCorte is no stranger to high-stakes whistleblower litigation. He received $38 million in whistleblower rewards from prior qui tam or whistleblower lawsuits against other pharmaceutical companies, including one in which Merck agreed to pay $250 million to settle allegations that it offered hospitals better terms than Medicaid for its heartburn medicine, Pepcid. Because of whistleblowers like Dr. LaCorte, the government recovered $2.8 billion in settlements last year under the False Claims Act, which allows individuals to commence whistleblower lawsuits on behalf of the government and share in any recovery. In return, the government paid whistleblower rewards totaling $597 million. Pharmaceutical cases tend to result in the largest whistleblower rewards. For example, a former sale representative for Endo Pharmaceuticals recently collected a $33.6 million whistleblower reward after the company agreed to pay $140 million to settle allegations that it engaged in off-label marketing of Lidoderm, a pain medication. In 2012, the government distributed $300 million in whistleblower rewards when GlaxoSmithKline agreed to pay $2 billion to settle allegations of off-label marketing and illegal kickbacks involving a number of its drugs. The key to a successful whistleblower case is having evidence of fraud or false claims submitted to Medicare or Medicaid. Mere allegations or suspicions of fraud are not enough. A successful whistleblower case requires evidence. And that creates some risks for potential whistleblowers. Gathering the evidence to support Medicare or Medicaid fraud claims may expose whistleblowers to allegations that they violated HIPAA privacy restrictions, company confidentiality policies, and even criminal statutes such as the Federal Computer Fraud and Abuse Act. If you have evidence of healthcare fraud or false claims submitted to Medicare or Medicaid, then you should consult with an experienced whistleblower lawyer immediately to protect your rights. You may be entitled to a substantial reward and legal protections as a whistleblower. But you also need legal advice to comply with your own obligation to maintain the privacy of confidential information. To schedule a free and confidential consultation with an experienced whistleblower lawyer, call John Howley, Esq. at (212) 601-2728. Two compounding pharmacies and four physicians have agreed to pay $10 million to settle allegations of false claims submitted to TRICARE, the military’s healthcare program.
The government alleged that one of the compounding pharmacies, Topical Specialists, was created by the four physicians and a pharmacist. The physicians referred their military patients to Tropical Specialists, but it was unable to obtain contracts with government healthcare programs. Topical Specialists then sent its prescriptions to another pharmacy, WELLHealth, which submitted the prescriptions to the federal government. The government alleged that the physicians steered military patients to Tropical Specialists with hundreds of costly prescriptions for pain and scar creams that may not have been medically necessary. Many of the patients told the government that they never used the creams. While the pharmacies billed the federal government tens of thousands of dollars for the creams, the actual cost of compounding the creams was only 4-5% of the amount billed to TRICARE. The government alleged that profits of up to 90% were passed on to the four doctors behind Tropical Specialists. The government also alleged that the four doctors recruited other doctors to write prescriptions to be filled by Tropical or WELLHealth, and passed along 40% of the reimbursement to those doctors. The doctors and the pharmacies settled the government’s fraud claims by agreeing to pay $10 million. False claims to government healthcare programs are very difficult to detect. For this reason, the government offers substantial rewards to whistleblowers who come forward with evidence of false claims to Medicare, Medicaid, and TRICARE. The whistleblower rewards range from 15% to 30% of the amount to government actually recovers plus attorneys’ fees and costs. Anyone who has evidence of false claims can become a whistleblower. This includes physicians, medical and billing staff, patients, vendors and competitors. If you have evidence of false claims submitted to Medicare, Medicaid or TRICARE, then you should consult with an experienced whistleblower attorney immediately to protect your rights. You may be entitled to a significant reward and legal protections. To arrange a free and confidential consultation with an experienced whistleblower lawyer, call John Howley, Esq. at (212) 601-2728. Whistleblower cases are taken on a contingency fee basis, which means there are no legal fees unless you win. |