Mylan to Pay $57M for Causing US and CA to Overpay for Drugs

April 13, 2012 by  

On February 28, 2012, Bloomberg News reported the settlement of a False Claims Act case in which Mylan Inc. (MYL), the generic-drug company, agreed to pay $57 million to settle claims it caused the U.S. and California to overpay for drugs.

The settlement came in cases filed by Ven-A-Care of the Florida Keys Inc., a specialty pharmacy, which claimed that Mylan defrauded the U.S. and California by falsely reporting inflated prices of drugs. Mylan knew that the governments would use those false reports to set higher reimbursement rates for Medicaid, Ven-A-Care claimed. California will get $26.3 million, the U.S. will get $22.2 million, and Ven-A-Care and its attorneys will get $8.5 million, court records show.

Ven-A-Care has settled more than two dozen lawsuits since 2000 that allowed state and federal governments to collect more than about $3 billion. Ven-A-Care collected more than $400 million in whistle-blower fees during that period.

Ven-A-Care sued under the U.S. False Claims Act and a similar statute in California, which lets whistle-blowers sue on behalf of the government and share in any recovery. While the California attorney general joined the lawsuit, the U.S. Justice Department didn’t.

The U.S. will still share in the recovery in the lawsuit, which is part of the so-called average wholesale price litigation consolidated before U.S. District Judge Patti Saris in Boston. She must approve the settlement.

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.

14 Hospitals to Pay Over $12M for Kyphoplasty Procedures

April 13, 2012 by  

Fourteen hospitals located in New York, Mississippi, North Carolina, Washington, Indiana, Missouri and Florida have agreed to pay the United States a total of more than $12 million to settle allegations that the health care facilities submitted false claims to Medicare, the Justice Department announced on February 7, 2012.

The settlements resolve allegations that these hospitals overcharged Medicare between 2000 and 2008 when performing 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 a less-costly outpatient procedure, but the government contends that the hospitals performed the procedure on an inpatient basis in order to increase their Medicare billings.

All of the settling facilities were named as defendants in a qui tam, or whistleblower, lawsuit brought under the False Claims Act, which permits private citizens, known as “relators,” to bring lawsuits on behalf of the United States and receive a portion of the proceeds of any settlement or judgment awarded against a defendant.

The lawsuit was filed in 2008 in federal district court in Buffalo, N.Y., by Craig Patrick and Charles Bates.   Mr. Patrick is a former reimbursement manager for Kyphon, and Mr. Bates was formerly a regional sales manager for Kyphon in Birmingham, Ala.  The relators will receive a total of approximately $2.1 million from the settlements.

The Justice Department has now reached settlements with more than 40 hospitals totaling over $39 million to resolve false claims allegations related to kyphoplasty claims submitted to Medicare. These settlements follow the government’s 2008 settlement with Medtronic Spine LLC, corporate successor to Kyphon Inc., which paid $75 million to settle allegations that the company defrauded Medicare by counseling hospital providers to perform kyphoplasty procedures as an inpatient procedure even though the minimally-invasive procedure should have been done in many cases on an outpatient basis.

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.


Citigroup to Pay $158M Over Bad Loans

April 13, 2012 by  

On February 16, 2012, Citigroup agreed to pay $158 million to settle a lawsuit over bad loans that the bank passed on to the Federal Housing Administration to insure. The whistle-blower who originally brought the case, Sherry Hunt, an employee of Citi’s mortgage department, said the company actively undermined the process that was supposed to check for fraud in order to push through reckless loans and get higher profits.

Of the $158 million in the settlement, Hunt will receive $30 million. Under the False Claims Act, whistle-blowers are rewarded for bringing in cases resulting in settlement in which it was alleged the government was defrauded.

According to the lawsuit, the bank passed along subpar loans to the Federal Housing Administration until very recently, making “substantial profits through the sale and/or securitization of FHA-backed insured mortgages” while “it wrongfully endorsed mortgages that were not eligible.”

In the settlement, Citi, which was bailed out by taxpayers in 2008 to the tune of $45 billion, “admits, acknowledges, and accepts responsibility” for passing on bad loans.

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.


Johnson & Johnson Pays $158M to Settle False Claims Act Case

February 6, 2012 by  

On January 19th, 2012, the AP reported that the state of Texas and a subsidiary of health care giant Johnson & Johnson reached a $158 million settlement in a Medicaid fraud lawsuit. The settlement allows the drugmaker to pay a fraction of the potential $1 billion in penalties and fines that state officials had initially sought.

The lawsuit was one of dozens of state and federal cases alleging that the company committed fraud by making false or misleading statements about the safety, cost and effectiveness of the anti-psychotic medication Risperdal, and improperly influencing officials and doctors to push the drug. The lawsuit said the company engaged in illegal marketing practices and kickbacks in an effort to boost Risperdal, and also alleged the drugmaker falsely told doctors Risperdal was safe to use with children when federal regulators had not approved its use.

The lawsuit originally was filed in 2004 by whistleblower Allen Jones, a former employee of the Office of the Inspector General of Pennsylvania, who said he uncovered the drug company’s actions in Texas while investigating claims in his home state. Texas joined the lawsuit in 2006.

Lawyers for Texas and Jones had said Texas was a key market for the drug companies because schizophrenic patients often rely on Medicaid to pay for medications, and Texas has one of the largest populations of Medicaid patients.

As the whistleblower, Jones will receive a portion of the settlement, but he said Thursday he doesn’t know yet how much. Details of the settlement were not released.

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.

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