Failure to Prevent Fraud Could Result in Personal Liability Company executives who fail to prevent health care fraud can be convicted of crimes and personally excluded from doing business with federal programs such as Medicare and Medicaid, even if they did not participate in or authorize the illegal conduct. Under the “responsible corporate executive” doctrine, the law may impose strict liability for an executive’s failure to prevent or correct a fraud committed by other employees. The latest case of strict liability involves executives of Purdue Pharma who were convicted of misdemeanors for failing to prevent or correct the “misbranding” of OxyContin. The executives were not personally involved in the misbranding, but under the Food, Drug, and Cosmetic Act, they were held personally responsible for the acts of other employees who misled doctors and patients about the risks of addiction to OxyContin. Based on their misdemeanor convictions, the Secretary of Health and Human Services then excluded the executives from participating in federal health care programs for 12 years. Exclusion is essentially a career ending disability because it means that these executives cannot work for any pharmaceutical company or health care provider that sells to patients who are eligible for Medicare, Medicaid, Veterans’ benefits, or any other type of government health care benefit program. The executives challenged their exclusion on the ground that there was no proof that they had personally engaged in any conscious wrongdoing, fraud, or false statements. Their involvement “consisted solely of omissions” – that is, they merely failed to prevent or correct the fraud by others. The U.S. Court of Appeals for the District of Columbia rejected their arguments. In Friedman v. Sebelius, the court held it was enough that the executives “could have but failed to prevent a fraud against the Government on their watch.” While the court sent the case back to the Secretary to justify the length of the exclusion, the court upheld the Secretary’s authority to exclude the executives even if they did not approve or participate in the misbranding. The key factor was that the executives had "authority either to prevent in the first instance or to promptly correct" the fraud. Senior executives are not the only ones at risk of criminal liability and exclusion when companies engage in health care fraud. As noted in a prior post, lower level employees who go along with a company’s fraud can also find themselves facing criminal charges. Protect yourself. If you become aware of false, dishonest or fraudulent conduct at work, then you should consult with an experienced attorney immediately to protect your rights. To schedule a free initial consultation by telephone or in person, call my office today at (917) 652-6504 or click here to communicate with me via email. John Howley New York, New York The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. I invite you to contact our law offices and welcome your calls, letters and electronic mail. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established. I practice law and offer legal services only in jurisdictions where I am properly authorized to do so. I do not seek to represent anyone in any jurisdiction where this web site does not comply with applicable laws and bar rules.
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A jury in Baltimore has awarded three women compensatory damages in amounts ranging from $4,000 to $10,000, plus punitive damages of $110,000 each, after finding that they had suffered sexual harassment and retaliation at the hands of their employer. The jury found that the three former employees Endoscopic Microsurgery Associates, a Baltimore-area medical practice, were subjected to unwanted sexual advances by the company's chief executive officer and chief financial officer. According to the lawsuit filed by the Equal Employment Opportunity Commission (EEOC), Linda Luz, a receptionist for Endoscopic Microsurgery Associates, P.A. / Mark D. Noar, M.D. & Associates, was repeatedly subjected to unwanted sexual advances and a sexually hostile work environment by CEO Dr. Mark Noar and CFO Martin Virga. After Luz repeatedly rejected the advances, the medical practice began retaliating against her by issuing to her unwarranted discipline and rescinding approved leave, which eventually culminated in her retaliatory termination. Study coordinator Jacqueline Huskins similarly experienced unwanted sexual advances from Noar and Virga, as did nurse Kimberly Hutchinson from Noar. Sexual harassment and retaliation for complaining about it violate Title VII of the Civil Rights Act of 1964. Sexual harassment includes intimidation, bullying or coercion of a sexual nature, unwelcome sexual advances, requests for sexual favors, and other verbal or physical harassment of a sexual nature. It can also include offensive remarks about a person’s sex. Both victim and the harasser can be either a woman or a man, and the victim and harasser can be the same sex. Unlawful retaliation occurs when an employer fires, demotes, harasses, or takes other types of adverse action to retaliate against an employee or job applicant because they complained about discrimination or sexual harassment, because they filed a charge of employment discrimination or sexual harassment, or because they participated in an employment discrimination proceeding such as an investigation or lawsuit. The law forbids retaliation when it comes to any aspect of employment, including hiring, firing, pay, job assignments, promotions, layoff, training, fringe benefits, and any other term or condition of employment. The EEOC attempted to reach a pre-litigation settlement in this case through its conciliation process. When those efforts failed, it brought suit in federal court and won. John Howley New York, New York The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. I invite you to contact our law offices and welcome your calls, letters and electronic mail. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established. I practice law and offer legal services only in jurisdictions where I am properly authorized to do so. I do not seek to represent anyone in any jurisdiction where this web site does not comply with applicable laws and bar rules. Most people just want to do their jobs and go home to their families at the end of the day. Unfortunately, if your boss is committing health care fraud, it may not be that simple. Consider the physician's assistant who is now facing up to five years in prison because he followed his doctor's instructions. Cal Graves was a 31 year old physician's assistant at the South Dallas Community Medical Center. The owner of the center, Dr. Daniel K. Leong, is about to go on trial for Medicare and Medicaid Fraud. According to court papers, Dr. Leong signed a blank prescription form and instructed Cal and other staff members to copy and use this pre-signed prescription as needed -- even when Dr. Leong never saw the patient. Patients had their prescriptions filled at pharmacies, which then submitted claims to Medicare and Medicaid for reimbursement. However, Medicare and Medicaid would not have paid those claims if they had known that Dr. Leong never saw the patient. When the government discovered the scheme, it arrested Dr. Leong for health care fraud. The government also arrested his physician's assistant, Cal Graves, for conspiracy to commit health care fraud because, by going along with the doctor's instructions, Cal helped execute the fraudulent scheme. Now Cal faces a maximum statutory sentence of five years in prison and a $250,000 fine. Sadly, good people get into this type of trouble all the time. A physical therapist goes along with her administrator's instructions to extend patient treatments beyond what is medically necessary and ends up charged with conspiracy to commit Medicare Fraud. A billing clerk follows her supervisor's instructions to "upcode" claims (i.e., use a code for a different service that results in a higher reimbursement) and ends up charged with conspiracy to commit Medicaid Fraud. A nurse goes along with the doctor's instructions to refer patients to a particular diagnostic lab that pays the doctor for each referral, and the nurse ends up charged with a felony for violating the Anti-Kickback statute. If you think no one will find out, think again. The government has very sophisticated computer systems that constantly monitor Medicare and Medicaid claims for suspicious patterns. It also has Medicare Fraud Strike Forces staffed with FBI agents and other experienced investigators around the country. And it pays out hundreds of millions of dollars in bounties every year to whistleblowers -- individuals who help the government uncover false and fraudulent claims in return for a percentage of the amount recovered. Protect yourself and get expert advice. Do not end up like Cal, facing five years in prison for doing nothing more than following instructions. If you become aware of false, dishonest or fraudulent conduct at work, then you should consult with an experienced attorney immediately to protect your rights. To schedule a free initial consultation by telephone or in person, call my office today at (917) 652-6504 or click here to communicate with me via email. You do not have to face this alone. John Howley New York, New York The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. I invite you to contact our law offices and welcome your calls, letters and electronic mail. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established. I practice law and offer legal services only in jurisdictions where I am properly authorized to do so. I do not seek to represent anyone in any jurisdiction where this web site does not comply with applicable laws and bar rules.
Brave Young Women Get Justice and Compensation Imagine you’re a teenage girl working for low wages at a McDonald’s, and the male employees harass you at work by kissing you, touching your private areas, and forcing your hand onto the men’s private parts. Then, when you complain, the company fires you. What would you do? Four brave women decided not to take it. They stood up to the employer and the men who were terrorizing them by filing charges of sexual harassment and retaliation with the U.S. Equal Employment Opportunity Commission (EEOC). Today, the EEOC announced that the employer will pay $1,000,000 to ten women, some of whom are teenagers, as compensation for the sexual harassment and retaliation they suffered. The employer will also be subject to a continuing consent decree requiring, among other things, that it post notices in its restaurants about the sexual harassment lawsuit and implement a comprehensive training program to enable its employees to identify sexual harassment and properly investigate internal complaints. Sadly, this case is not unusual. EEOC General Counsel P. David López commented that “sexual harassment in the restaurant industry remains a problem nationwide.” The good news is that help is available from experienced lawyers willing to take on these cases with no up-front fees and from the EEOC. EEOC General Counsel López pledged that harassment will not be accepted as simply “part of the culture” of the restaurant industry. “As seen in this case,” he stated, “many younger workers’ first experience with the workplace is in this industry and it is important that harassment of these workers not be tolerated.” Be aware that you must act quickly. Under some circumstances, you must file a claim within 180 days. In other cases, you have 300 days to assert your rights. If you have been subjected to sexual harassment, employment discrimination, or wrongful termination, then you should consult with an experienced attorney immediately to protect your rights. To schedule a free initial consultation by telephone or in person, call my office today at (212) 601-2728 or click here to communicate with me via email. John Howley New York, New York The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. I invite you to contact our law offices and welcome your calls, letters and electronic mail. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established. I practice law and offer legal services only in jurisdictions where I am properly authorized to do so. I do not seek to represent anyone in any jurisdiction where this web site does not comply with applicable laws and bar rules. Urgent Care Facility Agrees to Pay $10 Million to Settle Alleged False Claims Act Violations7/16/2012 An Arizona-based company, has agreed to pay $10 million to settle allegations that it submitted false claims for unnecessary testing and inflated charges. The company owns a chain of urgent care facilities in Arizona, Colorado, Texas, North Carolina, Ohio and Virginia. At issue are allegedly false claims for allergy, H1N1 virus, and respiratory panel testing submitted to Medicare, TRICARE, the Federal Employees Health Benefits Program, as well as the Medicaid programs of Colorado, Virginia, Texas, North Carolina and Arizona, by billing for unnecessary. The government also alleged that it inflated billings for urgent care medical services, a practice known as upcoding. The allegations were initially raised by a former employee who initiated a qui tam suit under the False Claims Act. The Act allows individual citizens, known as "relators," to bring suit on behalf of the United States and share in the recovery. The relator in this action will receive $1.614 million. In addition to the payment of $10 million, the settlement also involves a Corporate Integrity Agreement with the Department of Health and Human Services, Office of Inspector General, under which the company will be monitored for five years to ensure future compliance with all federal healthcare program rules. John Howley, Esq. New York, New York The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. I invite you to contact our law offices and welcome your calls, letters and electronic mail. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established. I practice law and offer legal services only in jurisdictions where I am properly authorized to do so. I do not seek to represent anyone in any jurisdiction where this web site does not comply with applicable laws and bar rules. A New Jersey physician pleaded guilty last week to taking kickbacks for referring patients to a diagnostic facility. The doctor is facing a possible five-year prison sentence for taking less than $35,000 per year for referrals of patients to an MRI facility. He also must forfeit the almost $70,000 he received from the MRI facility. A dozen other New Jersey doctors and nurse practitioners were arrested last week on similar charges of referring patients to the same MRI facility in return for kickbacks. An executive of the MRI facility was also arrested. Under the federal Anti-Kickback statute, anyone who knowingly and willfully receives or pays anything of value to influence the referral of federal health care business, including Medicare and Medicaid, can be prosecuted for a felony. Violations are punishable by up to five years in prison, criminal fines up to $25,000, administrative civil penalties up to $50,000, and exclusion from participating in federal health care programs. The statute contains a number of so-called "safe harbors" allowing certain types of business practices including investments in large publicly held health care companies; investments in small health care joint ventures; space rental; equipment rental; personal services and management contracts; sales of retiring physicians' practices to other physicians; referral services; warranties; discounts; employee compensation; group purchasing organizations; and waivers of Medicare Part A inpatient cost-sharing amounts. A number of "safe harbors" also exist in the context of managed care, including increased coverage, reduced cost-sharing amounts, or reduced premium amounts offered by health plans to beneficiaries; and price reductions offered to health plans by providers. It is important to note that the conduct at issue must fit squarely within the "safe harbor" provisions in order to avoid potential civil and criminal consequences. If there is any doubt at all, health care providers may request an advisory opinion from the Office of the Inspector General at the Department of Health and Human Services. If you are facing an investigation into possible violations of the anti-kickback law, or if you have questions whether a particular practice might violate the law, then you should consult with an experienced attorney immediately to protect your rights. To schedule a free initial consultation by telephone or in person, call our office today at (212) 601-2728 or click here to communicate with us via email. John Howley, Esq. New York, New York The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. I invite you to contact our law offices and welcome your calls, letters and electronic mail. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established. I practice law and offer legal services only in jurisdictions where I am properly authorized to do so. I do not seek to represent anyone in any jurisdiction where this web site does not comply with applicable laws and bar rules. The federal government recovers more than $4 billion every year under the False Claims Act, with more than 80% of cases involving pharmaceutical companies, medical professionals, and other healthcare-related defendants. These are complex cases that often involve claims for treble damages and penalties, potential exclusion from government programs, qui tam actions brought by private plaintiffs, and parallel criminal investigations and prosecutions. Lawline.com now offers a Continuing Legal Education (CLE) program on this rapidly developing area of the law. Entitled The False Claims Act: Enforcement Trends in Health Care, the program examines enforcement trends since the Fraud Enforcement and Recovery Act of 2009 and the Patient Protection and Affordable Care Act of 2010. The program also examines significant changes in enforcement policies and initiatives in the Obama Administration. Topics covered include:
John Howley, Esq. New York, New York Now that the Supreme Court has upheld the constitutionality of the Patient Protection and Affordable Care Act, the next big challenge is the creation of Health Benefit Exchanges in each of the 50 states. These exchanges are supposed to provide uninsured individuals and small businesses with affordable health insurance by pooling their risks and fostering competition among insurance companies for their business. Beginning in January 2014, states are required to establish American Health Benefits Exchanges for individuals and Small Business Health Options (SHOP) Exchanges for employers with fewer than 100 employees. In the future, states will also have the option of establishing exchanges for larger employers. The theory is that individuals and small businesses will be able to shop for insurance on these exchanges with the same type of bargaining power and spreading of risks that were formerly available only through large group health insurance plans at major corporations, government agencies, and labor unions. States may create the exchanges as government agencies or as non-profit organizations. Multiple exchanges may be established within a state for different geographic areas. States may also work together to form regional exchanges. In states that fail to establish their own exchanges, the federal government will step in and establish exchanges for them. The exchanges have the potential to promote competition among insurance companies for the business of more than 12 million new health insurance consumers. PricewaterhouseCoopers estimates that total premiums paid for policies purchased through the exchanges could reach $60 billion. In some states, enrollment through exchanges may exceed the number of people currently covered by the state’s Medicaid program. The exchanges also have the potential to lower costs by spreading the risks of insuring individuals with pre-existing conditions and other risk factors over a much larger – and, on average, healthier – pool of insured individuals. Establishing successful health insurance exchanges in every state, and attracting insurers to participate in exchanges in all 50 states, will not be simple or easy. The exchanges will be responsible for certifying insurers that may participate, providing information to help consumers understand their options, and ensuring transparency to allow for realistic assessments of financial risks. All this must be accomplished in the midst of partisan politics. One can imagine the extent of behind the scenes lobbying that will occur in state capitals throughout the country to influence the complex rules and regulations governing the allocation of risks in the various exchanges. One can also imagine how insufficient transparency could lead to misallocations of risks, much as the lack of transparency in derivatives markets left even supposedly sophisticated investors holding investments they did not understand. Stay tuned. The hard part has not yet begun. John Howley, Esq. New York, New York |
John Howley, Esq.
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