Stephani LeFlore, as Relator for the United States v. CVS Pharmacy, Inc.
May 14, 2011 by nick
CVS pays $17.5 Million to settle Medicaid Fraud
CVS, the giant retail pharmacy chain, has agreed to pay $17.5 Million to settle a whistleblower lawsuit accusing it of Medicaid fraud (“welfare fraud”).
THE FRAUD
According to her False Claims Acts lawsuit, CVS pharmacist Stephani LeFlore of Minnesota brought evidence to the government that CVS used a billing system for years that was designed to overbill Medicaid on prescription charges. Ms. LeFlore is represented by Minnesota attorneys Neil Thompson, Brian Wojtalewicz, Robert Christensen, and James VanderLinden, with local counsel Aaron Halstead of Madison, Wisconsin, where the case was filed in federal court.
It was done in relation to dual-eligible customers – those legitimately on Medicaid who also maintained their private health insurance coverage. The insurance coverages required CVS to charge the insurance company a smaller amount for prescriptions, and limited co-pay from the customer. When a person is allowed Medicaid coverage, the government always obtains an assignment of the person’s rights under their private health insurance coverage. The government essentially takes over the citizen’s rights under the coverage. This includes the common right to pay a smaller co-pay amount on prescriptions.
Ms. LeFlore claimed in her federal and state lawsuits that CVS should only have billed the Medicaid program the same limited co-pay on prescriptions that it would have normally billed the customer under the insurance plan. She alleged that CVS designed a billing software program for its pharmacies that consistently overcharged Medicaid on these co-pays. She claimed that these overcharges occurred on hundreds of thousands of prescription sales for well over five years.
The $17.5 Million settlement covers over-billings by CVS in the states of Minnesota, California, Massachusetts, Michigan, Florida, Indiana, Alabama, Nevada, New Hampshire and Rhode Island.
Ms. LeFlore first complained internally, but she was told by a supervisor that “corporate took care of the billing” and that she need not be concerned. She then retained her attorneys and commenced the False Claims Acts (qui tam) lawsuit in September, 2008. The lawsuit stayed under seal (non-public), according to the False Claims Acts and court orders, until the announcement of this settlement.
Ms. LeFlore and her attorneys will receive $2,595,460.00 as the reward under the federal and state False Claims Acts. They are also entitled to receive attorney fees from CVS.
STATE MEDICAID AGENCIES
Only CVS had the information necessary to reveal the correct, legal price established by the contracts of CVS with the insurance companies or related pharmacy benefit manager companies (PBMs). The states’ Medicaid agencies did not have this information. The Medicaid program is jointly financed by the Federal and State governments. It is administered by an agency in each state. Some state Medicaid agencies were aware of this wrongful billing potential, and directly addressed it in their rule making. Other states, particularly those states not included in the settlement, have missed the overbilling and are still paying it.
GOVERNMENT ATTORNEYS AND AGENTS
The government team on the investigation, negotiations and settlement was led by Leslie Herje, Assistant United States Attorney in Madison, Wisconsin, and Allie Pang, Trial Attorney in the Department of Justice, Civil Division, in Washington, D.C., with assistance from Nancy Mahoney, Assistant Attorney General in Massachusetts, and Elizabeth Valentine, Assistant Attorney General in Michigan.
Special Agents Jennifer Bowers and Gary Nelson of the federal Health and Human Services Office of Inspector General, and Joni Connell and Tom Gomach of the U.S. Attorney office in Madison, Wisconsin, provided good assistance to the lawyers for the government in the investigation.
CVS PHARMACY, INC.
CVS, the nation’s largest retail pharmacy giant, operates with over 7,100 stores across America.
THE FALSE CLAIMS ACT
The original federal False Claims Act was made law by Abraham Lincoln and the Civil War Congress, to enlist citizen whistleblowers in the fight against fraudulent war industry profiteers. It empowers citizens by giving them a reward, and substantial legal rights against retaliation by employers. In its present form, the government and whistleblowers can recover up to three times the amount of the fraud, plus substantial penalties and attorney fees. Whistleblowers (who are called “relators” under the law) may recover from 15% to 30% of the amounts collected from the frauding corporation. At least 29 states have passed their own similar false claims acts, and many other states are in the process. The government has recovered over $5.5 Billion against frauding corporations just since 2009. Medicaid and Medicare fraud, along with military contracting fraud, are the largest areas for recoveries, but ethical citizens have exposed fraud in the education, environmental and transportation fields, and in other areas of federal and state spending. The new state laws will help honest citizen whistleblowers and the government bring corporations cheating state taxpayers to account. More citizens are also using the newer IRS whistleblower reward law to bring tax cheating corporations to justice.
THE LAWYERS
Ms. LeFlore’s attorneys Neil Thompson, Brian Wojtalewicz, Robert Christensen, and James VanderLinden have years of experience confidentially advising and representing citizen whistleblowers in false claims act cases.
Their website is false-claims-act.com
Neil P. Thompson
Law Offices of Neil P. Thompson
2249 East 38th Street
Minneapolis, MN 55407-3083
Brian Wojtalewicz
Wojtalewicz Law Firm, Ltd.
139 N Miles St.
Appleton, MN 56208
1-800-377-1812
Robert P. Christensen
Robert P. Christensen, PA
670 Park Place East
5775 Wayzata Blvd.
St. Louis Park, MN 55416
612-333-7733
James G. VanderLinden
LeVander & VanderLinden, P.A.
5775 Wayzata Blvd.
670 Park Place East
St. Louis Park, MN 55416
952-767-6841
Aaron N. Halstead, Esq.
Hawks Quindel, S.C.
222 W. Washington Ave., Suite 450
Madison, Wisconsin 53701-2155
Tel: 608-257-0040
- Neil P. Thompson
Neil P. Thompson is uniquely qualified to observe and analyze fraud in
the pharmaceutical industry, as a licensed attorney experienced with class
action litigation involving pharmacy pricing and the Federal and State
False Claims Acts, and a licensed pharmacist for 34 years, both as a
pharmacy owner and working for over 130 different chain pharmacy
locations.
- Brian Wojtalewicz
Brian Wojtalewicz is the President-elect of the Minnesota Association for
Justice (formerly the Minnesota Trial Lawyers Association). For over a
decade he has been voted a Super Lawyer by his civil trial attorney peers
in Minnesota.
- Robert P. Christensen
Robert P. Christensen, P.A. is the Plaintiff/Consumer member of the
International Society of Primerus Law Firms in the State of Minnesota.
He is currently the Dean-Elect of the Academy of Certified Trial Lawyers
of Minnesota and Member of. the American Board of Trial Advocates.
- James G. VanderLinden
Jim VanderLinden has been an experienced and respected Minnesota trial
lawyer for decades. He is a member and past Dean of the Academy of
Certified Trial Lawyers of MN. He is also a member of the American
Board of Trial Advocates, an international organization of highly qualified
trial lawyers. He has been fighting corporate America for more than 3
decades.
- Aaron Halstead
Aaron Halstead is the past Chair of the Wisconsin State Bar Association’s
labor & employment law section, with over 20 years of success in the
labor and employment law fields. He is also on the Board of Directors of
the Workers’ Rights Center in Madison, Wisconsin.
Alaska Digitel to Pay Over $1.5 Million for False Claims to FCC’s Low Income Program
March 25, 2011 by casey
General Communication Inc. (GCI) has paid $1,556,075 to settle allegations that Alaska DigiTel LLC, a former Alaska limited liability company now owned by GCI, submitted false claims to the Federal Communications Commission’s (FCC) Low Income Support Program, the Justice Department announced February 22, 2011.
The government’s investigation of Alaska DigiTel was initiated by a lawsuit filed under the False Claims Act’s qui tam or whistleblower provisions, which permit private parties to sue for false claims on behalf of the United States and to share in any recovery. The whistleblower in this case, who alleged that Alaska DigiTel was signing up subscribers who did not qualify for the program, will receive $260,274 from the settlement.
The Low Income Support Program of the Universal Service Fund, which includes the Lifeline, LinkUp and Toll Limitation Services, was created by Congress in the Telecommunications Act of 1996 and is administered by the Universal Service Administrative Company for the FCC. Under the Low Income Support Program, eligible individuals may apply for free or discounted phone or wireless services. Reimbursement is paid directly to Eligible Telecommunications Carriers, such as Alaska DigiTel.
Today’s settlement resolves allegations that Alaska DigiTel violated the False Claims Act by submitting claims to the Low Income Support Program for improperly substantiated, duplicative, or otherwise ineligible subscribers for the period from Jan. 1, 2004, though Aug. 31, 2008.
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.
APS Healthcare to Pay $13 Million for False Claims
March 25, 2011 by casey
On Febrauary 22, 2011, the United States Attorney’s Office announced that Innovative Resources Group, LLC, doing business as APS Healthcare Midwest, reached a $13 million settlement with the United States and the state of Georgia to resolve allegations under the False Claims Act. According to the suit, APS Healthcare submitted claims to Medicaid through the Georgia Department of Community Health (DCH) for specialty services related to disease management and case management to members of the Georgia Medicaid Management Program (GAMMP) that it did not provide. This occurred from September 1, 2007 through February 28, 2010.
United States Attorney Sally Quillian Yates said of the settlement, “In this time of tight budgets and rising health care costs, the state of Georgia tried to improve its services to its Medicaid recipients by contracting with APS Healthcare. But instead of providing improved efficiency and effectiveness the company billed for, APS Healthcare took Medicaid’s money for itself and left some of our most vulnerable citizens without the aid they deserved.”
Under the GAMMP contract, APS Healthcare agreed to provide case and disease management services to Georgia Medicaid recipients and was paid a monthly fee for each member receiving such services. The government contends that APS Healthcare failed to provide the required services to a large portion of the Medicaid recipients and over-billed the Georgia Department of Community Health in its monthly invoices.
APS Healthcare has executed a Corporate Integrity Agreement (CIA) with the Department of Health and Human Services, Office of Inspector General, which will require an aggressive compliance program. The Corporate Integrity Agreement requires, among other things, intensive training and implementation of policies and procedures designed to ensure compliance with federal health care program requirements. In addition, APS Healthcare will be subject to external review of its compliance with state Medicaid contracts. If APS Healthcare fails to comply with certain material terms of the CIA, the company is subject to monetary penalties and exclusion from federal health care programs, including Medicare and Medicaid.
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 ramps up Medicaid fraud collections to $500M
February 19, 2011 by casey
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
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.
