Pharmacist Blows Whistle on CVS – America’s Largest Pharmacy Chain Settles for $37 Million
April 9, 2008 by jim
CVS, America’s largest pharmacy chain, recently agreed to a $36.7 million settlement over charges that they defrauded taxpayers by overcharging Medicaid for prescription drugs. The federal and state investigation of CVS began in 2003 when Bernard Lisitza, an Illinois pharmacist, alerted authorities to CVS’s practice of overcharging Medicaid to fill prescriptions for ranitidine, the generic form of the popular drug Zantac ®.
Mr. Lisitza, who will collect over $4.3 Million as his legal reward portion of the settlement, delivered evidence to the government that CVS was fraudulently switching prescriptions from the price-capped and less expensive tablet form of ranitidine to the more expensive capsule form in order to charge the government a higher price.
According to the government complaint, the illegal switch caused the federal government to pay CVS more than four times what it would have paid for the tablets. Capsules and tablets are considered different drugs and state pharmacy laws often prohibit the substitution of capsules for tablets. Because ranitidine capsules are so rarely prescribed, the federal government had not set a price ceiling as they had for tablets.
The case alleged that in switching the prescriptions, CVS had violated federal and state False Claims Acts which prohibit submitting fraudulent claims to the federal government. Companies that violate the False Claims Act may be found liable for damages up to three times the amount of the fraud, and $5,500 to $11,000 per false claim. The False Claims Act allows the whistleblower, known as the relator, to awards of 15%-20% of the government’s recovery in a settlement or lawsuit.
Pharmacists like Mr. Lisitza are in a unique position to uncover fraud and have played a critical role in helping state and federal governments recover tens of millions of dollars in false and fraudulent charges.
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.
Merck agrees to $650m settlement in Medicaid fraud case
March 14, 2008 by bob
H. Dean Steinke, a former sales manager who brought fraudulent sales practices by the drug maker Merck to light will be awarded $68 million dollars for his role as a whistleblower in the medical-care fraud case. This settlement is the largest of its kind under the federal False Claims Act. When asked by The Washington Post about his motivation for seeing the case through, Steinke replied:
“Sometimes you just get so frustrated about things that are wrong. These are the things that drive you, and you’re not going to stop until things are resolved.”
The case was in response to deceptive sales practices by Merck that flooded hospitals with the drugs Vioxx, Zocor, and Pepcid at heavily discounted prices in exchange for prescribing the medications for as many as three-quarters of eligible patients or being placed on a list of preferred medications. Many patients that rely on Medicaid were initially given prescriptions by hospitals at the cut-rate prices, only to have Medicaid foot the ongoing prescription cost at full price. This practice allowed Merck to gain advantage over its competitors making generic versions of the drugs in question. The practice also was in direct contradiction of the law that requires that pricing for the government be no more than for other customers.
The practice of gouging Medicaid for prescriptions which were written by doctors at hospitals given discounted pricing has been often called in to question recently. Many believe that dozens of drug companies may be guilty of this type of fraud. This case confirms that there are brave whistleblowers that are willing to take a stand and stop the taxpayer waste by drug companies.
If you are seeing Medicaid or other fraud on the government, contact us by calling 800-377-1812 for strictly confidential advice from experienced counsel, with no fee obligation.
Cathedral Healthcare Fraud Settlement
March 10, 2008 by brian
The Earth Times and the U.S. Department of Justice reported on March 4, 2008, settlement of a False Claims Act case against Cathedral Healthcare System, Inc. in New Jersey. Whistleblowers Peter Salvatori and Sarah Iveson will receive $848,000 of the $5.3 Million settlement paid by Cathedral.
The hospital system improperly increased charges to Medicare patients to obtain higher Medicare reimbursement from the federal government. The whistleblowers helped the federal government with the evidence that Cathedral had wrongfully increased charges for both inpatient and outpatient care of Medicare patients, illegally obtaining higher “outlier†type payments from Medicare than the hospital system was entitled to receive.
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.
Halliburton Couldn’t Stop Bunny Greenhouse
January 4, 2007 by bob
Despite prevailing tides at the U.S. Army Corps of Engineers, Bunny Greenhouse just couldn’t reconcile the lack of competition for large military contracts that were being awarded to the defense industry contractor Halliburton. As a longtime procurement official at that agency she was determined to deliver the best outcomes and full disclosure for American taxpayers on large-scale military contracts that were being handed out as no-bid contracts to Halliburton and its subsidiary Kellogg, Brown, and Root (KBR).
Bunny referred to the mismanagement of these matters as “the most blatant and improper contract abuse I have witnessed during the course of my professional career.”
From The Washington Post:
Bunny Greenhouse was once the perfect bureaucrat, an insider, the top procurement official at the U.S. Army Corps of Engineers. Then the 61-year-old Greenhouse lost her $137,000-a-year post after questioning the plump contracts awarded to Halliburton in the run-up to the war in Iraq. It has made her easy to love for some, easy to loathe for others, but it has not made her easy to know.
In late August, she was demoted, her pay cut and her authority stripped. Her former bosses say it’s because of a years-long bout of poor work habits; she and her lawyer say it’s payback for her revelations about a politically connected company.
Now Bunnatine Hayes Greenhouse is becoming one of the most unusual things known in the upper echelons of government and industry — a top-shelf bureaucrat who is telling all she knows. For honesty’s sake, she says.
