Department of Justice (DOJ)

Psychiatric Solutions gets DoJ subpoena

Anne Zieger — Fri, 01 Aug 2008 01:38:30 -0400

Franklin, TN-based Psychiatric Solutions has received a subpoena from the U.S. Department of Justice for information regarding its Riveredge Hospital in Forest Park, IL. This comes within a few weeks of the Illinois Department of Children and Family Services placing Riveredge on an "intake hold," meaning that it will not admit wards of the state to the facility. The Department is keeping Riveredge on hold until it is comfortable that children are safe there. Last month, it was reported that the facility had left sexual predators unguarded, who had assaulted at least 10 mentally disabled children during the past three years.

The situation doesn't seem likely to have an adverse financial effect on the company, which reported revenue of $451 million for the second quarter of this year, up from $350 million in the same period last year. The behavioral healthcare provider's CEO, Joey Jacobs, said it expects that the hold placed by the state of Illinois will be lifted from Riveredge soon.

To learn more about the situation:
- read this Modern Healthcare article (reg. req.)

HIPAA prosecution targets AR clinic's employee

Anne Zieger — Mon, 07 Jul 2008 05:07:15 -0400

A new HIPAA criminal case suggests that healthcare organizations may be not criminally liable for employee disclosures of protected health information if they have strong protections in place or are unaware of an employee's behavior. In the case, believed to be only the fourth criminal case pursued under HIPAA, a clinic nurse with the Northeast Arkansas Clinic pled guilty to wrongfully disclosing a patient's PHI and using it for personal and malicious intent. Andrea Smith admitted that she accessed a patient's medical file and shared it with her husband, who planned to use the information in an upcoming legal proceeding. Now, Smith faces up to 10 years in prison, $250,000 in fines or both. She was also terminated from the clinic when it found out about the breach. Legal observers had assumed, under previous Department of Justice guidelines issued in 2005, that the clinic would be liable for the actions for employees like Smith.

To learn more about this story:
- read this AMNews piece

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Department of Justice faces 500-case healthcare whistle-blower backlog

Anne Zieger — Wed, 02 Jul 2008 11:08:01 -0400

In theory, having scores of whistle-blowers file cases identifying potential fraud is a good thing. However, a recent surge in such cases has so overwhelmed staff at the U.S. Department of Justice that they're facing a backlog of more than 900 cases claiming that companies have defrauded the federal government, 500 of which involve pharmaceutical and healthcare firms.

Since 2001, whistle-blowers have filed 300 to 400 civil cases each year, but the 75-lawyer unit charged with reviewing such allegations only has the capacity to investigate about 100 cases each year. For that reason, whistle-blowers may wait more than a year to find out whether the DoJ is even prepared to move forward with their case. While the DoJ rejects about three-quarters of such cases as lacking merit, it's also made some spectacular cases work. In one striking example, it reached a $650 million settlement with Merck this year in connection with their alleged failure to repay Medicaid rebates.

Even given the constraints the agency faces, it has managed to collect almost $13 billion in recent years. Given this success, advocates are increasingly pressing for DoJ to invest more resources in catching up on the backlogged filings.

To learn more about this issue:
- read this Kaiser Daily Healthcare Policy Report article

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Consortium formed to fight medical fraud

Abby Christopher — Wed, 25 Jun 2008 12:12:22 -0400

The FBI is among several groups that have jointly established a new consortium of insurance investigators and other stakeholders to help fight medical fraud.

Participating groups include Consortium Against Insurance Fraud, the National Health Care Anti-Fraud Association, the National Insurance Crime Bureau, the Fraud Section of the Justice Department's Criminal Division and the FBI's Health Care Fraud Unit. The new group will facilitate cross training among health insurance and property/casualty insurance investigators. This will help them to understand each other's strategies and build cases against individuals and organizations suspected of medical fraud.

Earlier this month, Booz Allen won a $450,000 contract with the HHS's Office of the National Coordinator for Health Information Technology to determine and size and scope of medical fraud in the United States.

For more information:
- read the full Washington Business Journal story

Walgreens agrees to $35M drug-switching settlement

Thu, 05 Jun 2008 06:59:58 -0400

Walgreen Co. has agreed to pay $35 million to the U.S. Department of Justice to resolve allegations that it had switched patients to more expensive drugs to boost its Medicaid reimbursement. In the settlement, Walgreen Co. denies any wrongdoing. The case arose from a whistle-blower suit filed in 2003; the whistleblower asserted that between 2001 and 2005, Walgreens dispensed capsules rather than tablets of generic Zantac and Prozac, and brand-name and generic Eldepryl to Medicaid patients when doctors hadn't specified. Forty-six states and Puerto Rico will share the $16.4 million, and the federal portion of the settlement is $18.6 million. Whistleblower Bernard Listiza should receive a total of $5 million, which will be drawn from those moneys.

To learn more about the case:
- read this Modern Healthcare article (reg. req.)

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Cardiac devicemaker pays $2M settlement over corruption

Thu, 05 Jun 2008 06:59:57 -0400

Cardiac devicemaker AGA Medical has agreed to pay a $2 million criminal penalty and submit to three years of independent oversight by a external monitor to avoid federal prosecution on foreign corruption and bribery charges. A two-count indictment filed in 2005 had charged AGA officials with making corrupt payments to doctors at Chinese government-owned hospitals, who in turn got the hospitals to buy AGA's products. The charges also asserted that the company bribed officials at China's State Intellectual Property office to get its patents approved.

The settlement comes at the end of a U.S. Department of Justice investigation that has been ongoing; when AGA determined that the investigation was in play, in 2005, they made a voluntary disclosure of their own internal investigatory findings to the DOJ.

To learn more about the settlement:
- read this Modern Healthcare article (reg. req.)

AMA, SEIU ask court to stop UnitedHealth deal

Fri, 16 May 2008 06:59:56 -0400

A group of opponents including the AMA and the SEIU Nevada have filed suit to stop UnitedHealth Group's planned buyout of Las Vegas-based health plan Sierra Health Services. The deal already has been approved by the U.S. Department of Justice, but the groups are asking a federal court to reject the DoJ's decision. Groups opposing the buyout also include the Clark County Medical Society, Nevada State Medical Association and Clark County Commissioner Chris Giunchigliani. The groups say that the combined entity poses the threat of cutting physician compensation, as it would blend two of the three largest buyers of medical services in Clark County.

The two companies previously had signed a consent order with the DoJ that would allow the $2.6 billion deal to move ahead as long as UHG sold most of its SecureHorizons Medicare Advantage business in Las Vegas. (Humana said it would buy UnitedHealth's MA plan for $185 million.) However, the consent order has to be approved by the court.

To learn more about this challenge to UnitedHealth:
- read this Modern Healthcare piece (reg. req.)

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FL system settles federal claim over MD overpayments

Tue, 13 May 2008 06:59:56 -0400

Baptist Health South Florida has agreed to pay the federal government $7.75 million to settle allegations that it paid an oncology group excessive compensation to generate referrals for two of its hospitals.The payments flowed out of a contract under which the Oncology Hematology Group of South Florida provided radiation-related services to the Baptist Hospital of Miami and South Miami Hospital between 2003 and 2005.

The deal comes from voluntary disclosures by Baptist Health, which discovered, investigated and voluntarily disclosed the overpayment to the Department of Justice. Since discovering the problem, the system has bolstered its screens to make sure such overpayments can't take place again, according to CEO Brian Keeley.

To learn more about the settlements:
- read this piece in The Miami Herald

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AHA wants review of blockbuster PA health plan merger

Thu, 08 May 2008 06:59:58 -0400

The planned merger between Pennsylvania health plans Highmark and Independence Blue Cross has dragged out a while now, partly because of the size of the deal. The new entity would be a giant, with $22 billion in operating revenue, making it one of the country's largest health plans. While the boards of both plans announced the merger more than a year ago, the Pennsylvania Insurance Department hasn't approved the deal and, in fact, won't even begin hearings on the deal until this summer. In the meantime, those who oppose the merger as concentrating too much bargaining power in one entity have had time to get in gear.

Now, the American Hospital Association has joined the list of challengers questioning the merger. The AHA has sent a letter to the U.S. Department of Justice asking the agency to investigate--and maybe even block--the deal between the two large health plans. The department and the FTC, both of which have the right to intercede in mergers, didn't object when the deal initially was announced. However, the two plans must refile some deal-related document since the deal hasn't closed. This gives the department's Antitrust Division another chance to review the deal. The AHA would like the department to look into possible provider rate increases and fewer health plan choices in the state.

To learn more about the merger's progress:
- read this Modern Healthcare article (reg. req.)

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SPOTLIGHT: House plans several healthcare hearings

Thu, 01 May 2008 06:59:52 -0400

It should be an interesting summer for the healthcare industry, with Congress taking a closer look at Medicare Advantage plans, nursing home ownership structures, Department of Justice enforcement policy and more. The House Energy and Commerce Committee's Oversight and Investigations Subcommittee will release several reports on such matters in June and July, as well as holding hearings along the way. Article