Alpharma to Pay $42.5 Million for Kickbacks and Misinformation Campaign Over Morphine-Based Drug
April 6, 2010 by casey
On Tuesday, March 16th, the Justice Department announced the settlement of a False Claims Act case involving the pharmaceutical company Alpharma Inc. The drug manufacturer, now a subsidiary of King Pharmaceuticals Inc. of Bristol, Tennessee, agreed to pay $42.5 million to resolve allegations with its marketing of the morphine-based drug Kadian. Between January 1, 2000 and December 29, 2008, Alpharma was found to have bribe health care providers to promote and/or prescribe Kadian, and also made false claims about the safety and efficacy of the drug.
“Health care decisions must be based solely upon what is best for the individual patient and not on which pharmaceutical company is paying the doctor the biggest kickback,” said Rod J. Rosenstein, U.S. Attorney for the District of Maryland.
The lawsuit was initiated by a whistleblower, Debra Parks, through the qui tam provisions of the False Claims Act, which allows private citizens to expose fraudulent behavior with government money and share in any recovery. Of the $42.5 million recovered in the case, Ms. Parks will receive $5.33 million.
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.
Texas Hospital Group Pays U.S. $27.5 Million to Settle False Claims Act Allegations
November 3, 2009 by casey
On October 30, 2009, the U.S. Department of Justice reported that McAllen Hospitals has agreed to pay $27.5 million to resolve claims that it violated the False Claims Act. Between 1999 and 2006, the Texas-based company, which conducts business as South Texas Health System, induced doctors to refer patients to their hospitals through fraudulent payments disguised as contracts.
Bruce Moilan, a former employee of McAllen Hospitals, will receive $5.5 million from the proceeds of the settlement. Under the False Claims Act, whistleblowers such as Mr. Moilan can bring suits on behalf of the government and are entitled to a share of any settlements.
As part of the agreement, South Texas Health Systems will enter into a 5-year Corporate Integrity Agreement that requires it to establish procedures for tracking and evaluating financial arrangements between its health care facilities and their referral sources. The agreement also requires specific training for South Texas Health System representatives involved with financial arrangements, an independent third-party’s annual review of the health system’s compliance with certain Corporate Integrity Agreement obligations involving financial arrangements, and a report to the Office of Inspector General by the independent third-party reflecting the results of the review.
“Improper financial arrangements like these can increase the cost of health care by shifting provider attention to the quantity of treatments, rather than keeping it focused on the quality of care,” said Department of Health and Human Services Inspector General Daniel R. Levinson. “The CIA is important because it requires South Texas Health System to put systems in place to prevent this conduct from happening in the future.”
If you are witnessing fraud on the government, contact us by calling 800-377-1812 for strictly confidential advice from experienced counsel, with no fee obligation.
Indiana and Alabama Hospitals To Pay U.S. Over $8 Million for Medicare Fraud
October 5, 2009 by casey
Six hospitals in Indiana and Alabama have agreed to pay the United States more than $8 million to settle allegations that the health care facilities submitted false claims to Medicare, the Department of Justice announced on September 29, 2009.
The Indiana hospitals include St. Francis Hospital in Beech Grove, Deaconess Hospital in Evansville and St. John’s Hospital System in Anderson. The hospitals have agreed to pay the United States $3,158,629, $2,110,034 and $826,256, respectively.
The Alabama hospitals include St. Vincent’s East Hospital and St. Vincent’s Birmingham Hospital, both located in Birmingham, and Providence Hospital, located in Mobile. These facilities have agreed to pay the United States $1,459,395, $422,748 and $381,713, respectively.
The settlements resolve allegations that, from 2002 to 2008, the six hospitals overcharged Medicare each time they performed kyphoplasty, a minimally-invasive procedure used to treat certain spinal fractures that often are due to osteoporosis. In many cases, the procedure can be performed safely as an out-patient surgery, but the government contends that the hospitals performed the procedure on an in-patient basis in order to increase their Medicare billings.
This lawsuit was filed in 2008 in federal district court in Buffalo, N.Y., by Craig Patrick and Charles Bates under the qui tam or whistleblower provisions of the False Claim Act. Under those provisions, a private party, known as “relator,” can file an action on behalf of the United States and receive a portion of any recovery. Mr. Patrick, of Hudson, Wis., is a former reimbursement manager for Kyphon, and Mr. Bates is a former regional sales manager for Kyphon in Birmingham, Ala. The relators will receive approximately $1.4 million as their share of the settlement proceeds.
The settlements with these Indiana and Alabama facilities follow the government’s June 2009 settlement with three Minnesota hospitals for alleged kyphoplasty-related Medicare fraud claims, as well as the government’s May 2008 settlement with Medtronic Spine LLC, corporate successor to Kyphon Inc. Medtronic Spine paid $75 million to settle allegations that the company defrauded Medicare by counseling hospital providers to perform kyphoplasty procedures as an in-patient procedure.
If you are witnessing fraud on the government, contact us by calling 800-377-1812 for strictly confidential advice from experienced counsel, with no fee obligation.
Pharmaceutical Giant Still Battling States Over Fraud
October 5, 2009 by casey
On September 29, 2009, Legal Newsline published an update on a multi-state case involving Eli Lilly & Co. In the case, the states argued that the pharmaceutical giant promoted off-label uses for the drug, Zyprexa, and also claimed the drug’s side effects overburdened their Medicaid programs.
So far, eight of the 12 states with cases have settled with Eli Lilly on the same terms, with differing monetary values according to state population. These states include West Virginia, Connecticut, Minnesota, Montana, New Mexico, Louisiana, Utah and Idaho. The four states yet to reach agreements are Arkansas, Mississippi, Pennsylvania and South Carolina.
Eli Lilly has already settled consumer protection claims with 33 other states for $62 million, and also agreed to pay $1.4 billion to settle federal civil and criminal claims stemming from the alleged off-label marketing.
The payment also benefited the Medicaid programs of more than 30 states that received approximately $362 million, collectively.
If you are witnessing fraud on the government, contact us by calling 800-377-1812 for strictly confidential advice from experienced counsel, with no fee obligation.
