Three Health Agencies Sued For Using Unqualified ‘Home Health Aides’

On December 17, 2009, the office of the New York Attorney General announced a $24 million settlement to a False Claims Act lawsuit involving three home health agencies. The agencies utilized hundreds of “home health aides” with little or no required training. These aides were sent to the homes of New York’s elderly, frail and indigent to provide sensitive medical care they were not qualified to administer. As a result, Medicaid was billed millions of dollars for illegitimate services.

Under the terms of the settlement, B&H Health Care Services, Inc., known as Nursing Personnel Home Care, Excellent Home Care Services, LLC, and Extended Nursing Personnel CHHA, LLC, will return $23,963,100 to Medicaid–a program jointly funded by the state and federal governments. Of this amount, the State of New York will receive a total of $14,377,860.

The settlements were initiated by lawsuits filed under the whistleblower provisions of the False Claims Act, which allow private citizens to file suit on behalf of the United States for fraud and share in any recovery. Maurice Keshner will receive approximately $1,693,343 from New York’s recovery from Nursing Personnel. Deborah Yannicelli will receive approximately $994,080 from New York’s recovery from Extended and Excellent. The Act also provides protection against job retaliation for whistleblowing.

Medicaid requires home health aides – who primarily care for elderly patients, administer medication, and provide services such as catheter care, colostomy care and wound care – to successfully complete a training program licensed by the Department of Health or the State Education Department. All such aides must receive a minimum of 75 hours of training, including sixteen hours of supervised practical training conducted by a registered nurse.
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.

Pharmaceutical Company Will Pay $21 Million for Overpricing Respiratory Drugs

On December 17, 2009, Bloomberg News reported that Schering-Plough Corp., a drug company, will pay $21.3 million to settle a False Claims Act lawsuit against it. The settlement stems from a whistleblower lawsuit against several drug companies accused of Medicaid fraud.

The suit alleged that Schering deliberately inflated the average wholesale price it reported to California for Albuterol, a treatment for asthma and other breathing problems, as well as other drugs. As a result, California’s Medi-Cal program overpaid millions of dollars in pharmacy reimbursements.

Schlering was recently acquired by Merck & Co. of New Jersey. Merck didn’t admit wrongdoing and said its pricing practices complied with regulations and contracts. The settlement amount was reserved and significantly funded by Schering-Plough prior to its merger with Merck in November, Merck said.
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.

University of Phoenix Caught Cheating Government; Will Pay $78.5 Million

On December 14, 2009, Earth Times reported the $78.5 million settlement of a False Claims Act lawsuit against the University of Phoenix. The lawsuit, which was started by whistleblowers, alleged that the University used false statements to obtain an excess of federal student loans and Pell Grant monies. Reportedly, the University was making incentive payments to recruiters based on the number of students they recruited or enrolled–a direct violation of the Higher Education Act.

“The Higher Education Act prohibits colleges and universities whose students receive federal financial aid from paying their recruiters based on the number of students enrolled, which creates a risk of encouraging recruitment of unqualified students,” explained Nancy Krop, another lawyer on the trial team. “This case focused a powerful spotlight on that law, and how Congress meant it to be applied.”

“The settlement is a huge victory for taxpayers and the federal government,” according to Robert J. Nelson, lead attorney for the whistleblower plaintiffs. “This settlement sends a clear message to the for-profit education industry compliance with the Higher Education Act’s incentive compensation ban must be achieved,” said Nelson.
The University of Phoenix, which denied the whistleblowers’ allegations, previously paid $9.8 million to the Department of Education in 2004 to resolve administrative claims that it was paying improper incentive compensation to its recruiters. Those administrative proceedings were triggered by the allegations of the same whistleblowers in this case. Nearly $11 million of the $78.5 million will be allocated as statutory attorneys’ fees and costs, a portion of which will be paid to the whistleblowers who brought the case.

The False Claims Act is a federal statute that permits whistleblowers to sue on behalf of the government for fraud committed against the government and to share in the recovery if the suit is successful.

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.