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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Under federal and state laws, a pharmacy that fills prescriptions for Medicaid beneficiaries may not charge the government more than the drug’s “usual and customary” price. The whistleblower in this case came forward with evidence that Walgreens charged government programs more for prescription drugs than it charged some customers who were enrolled in the company’s Prescription Savings Club (“PSC”).
After the whistleblower filed a qui tam or whistleblower lawsuit “under seal” (that is, in secret), the government conducted an investigation using the evidence he provided. Walgreens ultimately settled the fraud claims by agreeing to pay back $60 million to federal and state Medicaid programs. As part of the settlement, the company admitted that the government “paid Walgreens more money in reimbursements than they would have paid if Walgreens had identified its PSC prices as its [usual and customary] prices.” It is unlikely that the fraud would have been discovered without help from a whistleblower on the inside. This case demonstrates the power of a single individual to save the government – and taxpayers – tens of millions of dollars by coming forward with evidence of fraudulent claims. It is also another example of the significant rewards that are available to whistleblowers who help the government uncover fraud, waste, and abuse in our healthcare programs. The whistleblower laws, however, are complicated. This is not something a whistleblower can or should handle on their own. If you have evidence of false claims submitted to Medicare or Medicaid, then you should consult with an attorney immediately to understand and protect your rights. To schedule a consultation with an experienced whistleblower lawyer, call John Howley, Esq. at (212) 601-2728. The government has arrested more than 300 physicians, clinic owners, and other healthcare professionals for stealing more than $900 million from Medicare.
The defendants are charged with a number of different Medicare fraud schemes including home healthcare fraud and pharmacy fraud. In most cases, the government charges that the defendants billed for services that were not medically necessary or were never actually provided to patients. Some of the defendants are accused of recruiting drug addicts on the streets and in homeless shelters by offering them narcotics in return for their Medicare or Medicaid cards. The defendants allegedly used the Medicare and Medicaid cards to bill for services that were not medically necessary and, in many case, not actually provided. In one case, an individual pharmacist in New York is accused of obtaining more than $51 million by filing fraudulent Medicare and Medicaid claims. Today’s nationwide takedown exceeds a record set last year, when 243 defendants were arrested for defrauding Medicare of more than $700 million. Think about that for a moment. Every year, the government arrests people who steal billions of dollars from the Medicare and Medicaid program. Every year! Medicare and Medicaid fraud is a threat to every hard-working citizen in this country. When billions of dollars are stolen from these programs every year, it puts your future benefits at risk. In fact, the trust fund supporting Medicare is projected to run out of money within the next 10-15 years. If you have evidence of Medicare or Medicaid fraud, you must come forward to help the government put a stop to it. Your efforts will be protected and rewarded. Whistleblowers are entitled to legal protections and financial rewards of up to 30% of the amount recovered by the government. 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. A former Abbott Laboratories employee will receive a $1 million whistleblower reward for reporting kickbacks between the pharmaceutical giant and the second largest nursing home consulting pharmacy in the country.
Meredith McCoyd and another former Abbott Laboratories employee brought lawsuits under the qui tam or whistleblower provisions of the False Claims Act. Under that law, an individual citizen who has evidence of false claims submitted to government programs may start a lawsuit on behalf of the government. The lawsuit is filed “under seal” (in secret) and the evidence is disclosed only to the government. The government then investigates the claims and decides whether to pursue the suit. If the government recovers money as a result of the lawsuit, the whistleblower is entitled to a reward of between 15% and 30% of the amount actually recovered. Ms. McCoyd filed a qui tam lawsuit alleging that Abbott Laboratories paid kickbacks to pharmacies in exchange for promoting the company’s prescription drug Depakote for nursing home patients. She alleged that the kickbacks were disguised as rebates, educational grants and other financial support. Under the Anti-Kickback Law, it is illegal for a pharmaceutical company or healthcare provider to offer or pay anything of value in return for referrals of Medicare or Medicaid patients. If kickbacks are paid, then every resulting claim for reimbursement is deemed a “false claim.” Both the entity that pays the kickbacks and the entity that receives the kickbacks may be liable for treble damages and penalties. In this case, the consulting pharmacy agreed to pay $6.5 million to the federal government and $2.5 million to state governments to resolve claims that it accepted kickbacks from Abbott Laboratories. The whistleblower who started the qui tam lawsuit will receive a reward of $1 million from the federal government. She may also receive whistleblower rewards from the state governments under their false claims acts. If you have evidence that a pharmaceutical company or healthcare provider is paying or receiving anything of value in return for patient referrals, then you should consult with an experienced whistleblower lawyer immediately to protect your rights. You may be eligible for a substantial reward and legal protections as a whistleblower. To arrange a free and confidential consultation, call John Howley, Esq. at (212) 601-2728. |