Merck agrees to $650m settlement in Medicaid fraud case

H. Dean Steinke, a former sales manager who brought fraudulent sales practices by the drug maker Merck to light will be awarded $68 million dollars for his role as a whistleblower in the medical-care fraud case. This settlement is the largest of its kind under the federal False Claims Act. When asked by The Washington Post about his motivation for seeing the case through, Steinke replied:

“Sometimes you just get so frustrated about things that are wrong. These are the things that drive you, and you’re not going to stop until things are resolved.”

The case was in response to deceptive sales practices by Merck that flooded hospitals with the drugs Vioxx, Zocor, and Pepcid at heavily discounted prices in exchange for prescribing the medications for as many as three-quarters of eligible patients or being placed on a list of preferred medications. Many patients that rely on Medicaid were initially given prescriptions by hospitals at the cut-rate prices, only to have Medicaid foot the ongoing prescription cost at full price. This practice allowed Merck to gain advantage over its competitors making generic versions of the drugs in question. The practice also was in direct contradiction of the law that requires that pricing for the government be no more than for other customers.

The practice of gouging Medicaid for prescriptions which were written by doctors at hospitals given discounted pricing has been often called in to question recently. Many believe that dozens of drug companies may be guilty of this type of fraud. This case confirms that there are brave whistleblowers that are willing to take a stand and stop the taxpayer waste by drug companies.

If you are seeing Medicaid or other fraud on the government, contact us by calling 800-377-1812 for strictly confidential advice from experienced counsel, with no fee obligation.

Connecticut Hospital Settles False Claims Case

The Yale Daily News and U.S. Attorney Kevin O’Connor announced on March 8, 2008, that Yale-New Haven Hospital agreed to pay a $3.78 Million fine on a False Claims Act case for Medicare fraud allegations, stemming from over billing of Medicare for infusion therapy, chemotherapy and blood transfusions on patients.

The Oncology Infusion Service was also accused of giving medications and conducting lab studies without a doctor order. Federal Medicare only allows payment for one unit of infusion therapy, chemotherapy or blood transfusion per patient per day, but the hospital had billed Medicare as often as five times per day for the same patient. This is the second False Claims Act settlement by this hospital.

If you are seeing fraud on the government, contact us by calling 800-377-1812 for strictly confidential advice from experienced counsel, with no fee obligation.

Cathedral Healthcare Fraud Settlement

The Earth Times and the U.S. Department of Justice reported on March 4, 2008, settlement of a False Claims Act case against Cathedral Healthcare System, Inc. in New Jersey. Whistleblowers Peter Salvatori and Sarah Iveson will receive $848,000 of the $5.3 Million settlement paid by Cathedral.

The hospital system improperly increased charges to Medicare patients to obtain higher Medicare reimbursement from the federal government. The whistleblowers helped the federal government with the evidence that Cathedral had wrongfully increased charges for both inpatient and outpatient care of Medicare patients, illegally obtaining higher “outlier” type payments from Medicare than the hospital system was entitled to receive.

If you are seeing fraud on the government, contact us by calling 800-377-1812 for strictly confidential advice from experienced counsel, with no fee obligation.

AstraZeneca to pay $215 Million in Medicaid Fraud Case

The news out of Alabama marks the second major decision in a Medicaid fraud case this month.

from the Associated Press:
MONTGOMERY, Alabama – A state-court jury awarded Alabama $215 million in its Medicaid drug-price-fraud suit against an AstraZeneca PLC unit.

The state had claimed the unit, AstraZeneca Pharmaceuticals LP, made Alabama’s Medicaid system pay too much for drugs prescribed to its patients by inflating prices. The firm said it had obtained for the state the best price it could for its drugs.

The circuit-court jury said the subsidiary must pay $40 million in compensatory damages and $175 million in punitive damages.

This type of Medicaid and Medicare fraud has been prevalent in recent years. Without the help of courageous whistleblowers, this fraud against the government would go on without consequence. If you are seeing fraud on the government, contact us via email or call (800) 377-1812 for strictly confidential advice from experienced counsel, with no fee obligation.