Whistle Blower

Amerigroup may settle Medicaid fraud charges soon

Anne Zieger — Tue, 22 Jul 2008 11:31:25 -0400

An Illinois health plan that refused to enroll high-risk patients in its Medicaid plan may soon be settling a lawsuit brought by state and federal authorities for a whopping $334 million. Amerigroup Corp., based in Virginia, was ordered in 2006 to pay $144 million in damages to Illinois and the federal government. Later, a federal judge added another $190 million in civil fines against the company, which was found to have filed more than 18,000 false Medicaid claims. Originally, Amerigroup appealed the verdict, but later it entered into settlement talks with the plaintiffs.

Charges against Amerigroup were originally filed in 2002 by Cleveland Tyson, former vice president of government relations at the plan's Illinois subsidiary. His lawsuit then prompted an investigation by the state attorney general and the U.S. Attorney in Chicago, who later joined the whistle-blower suit. As the original whistle-blower, Tyson could see a payout of 15 percent to 25 percent of the total judgment.

To learn more about the case:
- read this Chicago Tribune article

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Federal False Claims act uses narrowed, but legislators still want expansion

Anne Zieger — Mon, 21 Jul 2008 13:22:23 -0400

Things should get interesting in coming months when it comes to the application of the False Claims Act. On the one hand, the U.S. Supreme Court recently narrowed the application of the Act--but meanwhile, legislators continue to look at options for expanding the government's False Claims powers.

In the June decision, the Supremes settled a squabble over whether contractors who don't bill the government directly, but instead go through another entity that contracts with the U.S., can be held liable under the False Claims Act for fraudulently-obtained funds. The court said that contractors could, but only if they intended to defraud the U.S. itself, and that the alleged false statements influenced the government's decision to pay the claim. Some legal analysts argue that the decision makes it harder for physician whistle-blowers to prove cases using the False Claims statute, such as allegations of illegal off-label marketing by pharmaceutical companies. Others note that it will help weed out weak cases and offer extra defense to physicians sued under the statute.

Legislators, meanwhile, had a different outcome in mind. A bill pending on the Hill, the False Claims Correction Act, would remove rules against whistle-blower claims being brought on the basis of publicly-disclosed information or claims lacking specific proof. The government could dismiss such claims, but right now defendants can ask that the judge do so.

To learn more about these trends:
- 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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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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DoJ joins whistle-blower suit against OH MDs, hospital

Wed, 02 Apr 2008 07:59:57 -0400

The U.S. Department of Justice has added its firepower to a whistle-blower lawsuit contending that a hospital in Cincinnati was rewarding cardiologists who generated the most revenue for the hospital. The suit, which originally was filed in 2003 by cardiologist Harry Fry, contends that Cincinnati's Christ Hospital conspired together with a large cardiology group, Ohio Heart & Vascular Center, to make sure that cardiologists had access based only on how much revenue they brought in the previous year. The suit also contends that cardiologists in the group were rewarded for their collusion in this scheme with a kickback, in this case an opportunity to bill patients for diagnostic services, the DoJ says. Lawyers for the 511-bed hospital, of course, say the suit is without merit.

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

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