Texas ramps up Medicaid fraud collections to $500M

AUSTIN, Texas (AP) — A state official says increased enforcement has helped Texas recover more than $500 million in Medicaid fraud cases since 2007.

David Morales, deputy first assistant attorney general, told state senators Tuesday the increase coincides with an expansion of the Medicaid civil fraud division in Texas four years ago.

State lawmakers are still looking for ways to boost fraud prevention. Texas faces a budget shortfall of at least $15 billion. Controlling the state’s Medicaid expenses has been identified as a top priority.

re-posted from The Associated Press from February 15, 2011

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CareSource & Entities to Pay $26 Million to Resolve False Claims Allegations

On February 1, 2011, the US Department of Justice announced that CareSource, CareSource Management Group Co. and CareSource USA Holding Co. have agreed to pay the United States and the state of Ohio $26 million to resolve allegations that they caused Medicaid to make payments for assessments and case managements they failed to provide to children and adults.

The settlement resolves a whistleblower action filed under the False Claims Act by two former employees at CareSource, Laura Rupert and Robin Herzog. The whistleblowers filed a suit when they became aware of CareSource’s practices and sought to rectify the harms caused to these Medicaid recipients. The False Claims Act’s qui tam, or whistleblower, provisions allow private persons with knowledge of fraud to file suit on behalf of the United States and share in any recovery. As part of this settlement, Rupert and Herzog will receive a share of the federal portion of the settlement totaling approximately $3.1 million.

CareSource, which is headquartered in Dayton, Ohio, provides managed care benefits to Medicaid beneficiaries in Ohio, Indiana and Michigan. The settlement resolves allegations that between January 2001 and December 2006, the CareSource entities knowingly failed to provide required screening, assessment and case management for adults, and children with special health care needs. As a result, it was alleged that CareSource received millions of dollars in Medicaid funds to which it was not entitled. The CareSource entities subsequently submitted false data to the state of Ohio so that it appeared they were providing these required services to improperly retain incentives received from Ohio Medicaid and to avoid penalties.

“Cash-strapped Medicaid programs, such as Ohio’s, can ill afford conduct such as this, designed to improve this company’s bottom line at the expense of a program benefitting the poor and disabled,” said Tony West, Assistant Attorney General for the Civil Division.

This settlement is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT). One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover approximately $5.3 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 have topped $6.8 billion.

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.

source: United States Department of Justice

Oracle America to Pay United States $46 Million to Resolve False Claims Act Allegations Against Sun Microsystems

Oracle America Inc. has agreed to pay the United States $46 million to settle claims that Sun Microsystems Inc., a corporation that merged with Oracle in 2010, submitted false claims and caused others to submit false claims to the General Services Administration (GSA) and other federal agencies, the Justice Department announced on January 31, 2011.

The allegations that Sun improperly paid kickbacks were first made in a lawsuit that whistleblowers Norman Rille and Neal Roberts filed in the U.S. District Court for the Eastern District of Arkansas in 2004. Under the FCA’s qui tamprovisions, private citizens may file actions on behalf of the United States alleging the submission of false claims and share in any recovery.

This settlement resolves allegations under the False Claims Act (FCA) and Anti-Kickback Act that Sun knowingly paid kickbacks to systems integrator companies in return for recommendations that federal agencies purchase Sun’s products. Sun executed agreements with consulting companies that provided for the payment of fees each time the companies influenced a  government agency to purchase a Sun product. These kickback allegations are part of a larger, ongoing investigation of government technology vendors that has resulted in settlements to date with six other companies.

The settlement also resolves claims under the FCA that Sun’s 1997 and 1999 GSA Schedule contracts were defectively priced because Sun provided incomplete and inaccurate information to GSA contracting officers during contract negotiations, as well as claims that the incomplete and inaccurate information resulted in defective pricing of Sun’s contract with the U.S. Postal Service and GSA Schedule contracts held by two resellers of Sun products. The defective pricing information that Sun disclosed to GSA was subsequently relied on by the Postal Service in negotiating a contract with Sun, as well as by GSA in negotiating contracts with two resellers of Sun products.

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.

source: US Department of Justice

Drug Maker Actavis Will Pay $170 Million to Texas for Improper Drug Price Reporting

On February 1, 2011, the office of Texas Attorney General Greg Abbott released the settlement of a False Claims Act case that involved fraudulent drug price reporting. A jury in Travis County found that drug manufacturer Actavis Mid-Atlantic, LLC misrepresented its drug prices to the taxpayer-funded Medicaid program. The jurors determined that Actavis and co-defendant Actavis Elizabeth, LLC should pay Texas and the federal government $170.3 million for defrauding Medicaid.

The State’s legal action against Actavis stems from a whistleblower lawsuit that was filed under seal by a small Florida-based pharmacy. The pharmacy owners pursued their claim after discovering Actavis reported artificially inflated prices to Medicaid for its drugs.

“The jury determined that the defendants owe $170 million because of improper drug price reporting,” Attorney General Abbott added. “Considering the hundreds of millions of dollars that are at stake, we will continue to vigilantly pursue providers that falsely report prices to Medicaid and defraud the taxpayers.”

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.