LegalNewsline.com reported on September 4, 2008, that Healthfirst will pay $35 million to the state of New York to settle claims that it violated that state’s False Claims Act.

Healthfirst, the largest Medicaid Managed Care provider in New York, was alleged to have given incentives to employees based on the number of people they enrolled from 1999 to 2003.

“Medicaid providers engaged in prohibited compensation practices are committing an act of fraud against New York’s taxpayers,” Attorney General Andrew Cuomo said. “Marketing reps must not engage in a numbers game that could result in ineligible persons being enrolled in the Medicaid program.”

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.

The U.S. Department of Justice on September 15, 2008, released a settlement in which the Staten Island University Hospital (SIUH) has agreed to pay $74,032,565 to the United States and $14,883,883 to the State of New York to resolve claims of Medicaid, Medicare, and TRICARE (the U.S. military’s health insurance program) fraud. The total recovery of $88,916,448 is one of the largest ever against a single U.S. hospital.

Investigations carried out by the government established four individual cases of fraud.  Two of the four were introduced through suits filed by separate whistleblowers: Dr. Miguel Tirado, former Director of Chemical Dependency Services at SIUH, and Elizabeth M. Ryan, the widow of an SIUH cancer patient. Both individuals filed their suits through the federal False Claims Act, and Tirado also filed through the New York State False Claims Act.  In accordance with the settlement, the federal government will award Tirado with $2.3 million and Ryan with $3.75 million, and Tirado will also receive an additional $2.97 million from the State of New York.

In Tirado’s suit, government investigations established that from July 1994 to June 2000, SIUH had submitted claims for payment for detoxification treatment to patients for which the hospital had not received a license from the New York State Office of Alcoholism and Substance Abuse Services (OASAS). SIUH provided detoxification treatment in 12 more beds than it was authorized to do so. For this act of fraud, the hospital has agreed to pay the U.S. $11,824,056, and the State of New York $14,883,883.

In Ryan’s suit, it was found that from 1996 through 2004, SIUH had defrauded Medicare and TRICARE by using incorrect billing codes for cancer treatment in order to receive reimbursement for treatments covered by neither Medicare nor TRICARE. SIUH will pay $25,022,766 to the U.S. to settle this claim.

The other two claims established in the suit were resolved prior to its filing. The first concerns SIUH’s intentional inflation of its resident count from 1996 to 2003 in its “cost reports.” These cost reports provide the basis for how much Medicare determines to pay the hospitals for their Graduate Medical Education programs. For the settlement of this claim, SIUH has agreed to pay the U.S. $35,706,754.

In the final suit, it was found that SIUH improperly billed Medicare and Medicaid for treatment of patients in unlicensed beds from July 2003 to September 2005. The hospital has agreed to pay $1,478,989 to the U.S. to settle this claim.

In addition to the monetary penalties to be paid by SIUH, the hospital has also agreed to a Corporate Integrity Agreement with the Office of Inspector General, Department of Health and Human Services (OIG-HHS). In accordance with this agreement, SIUH will be required to maintain a compliance program to ensure against more fraud.

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.

On August 19, 2008, the St. Petersburg Times of Florida reported an agreement between WellCare Health Plans Inc. and U.S. prosecutors for the company to pay $35.2-million as part of an ongoing Medicaid fraud investigation.  The case has yet to be settled, however, and the agreement does not inhibit the national or state government from persisting in its investigation or making further claims. 

Constituting the $35.2 million is $24.5 million in compensation for Medicaid “behavioral health” claims by two of the companies HMO subsidiaries: WellCare of Florida Inc. and HealthEase of Florida Inc, and $10.7 million to be held conditionally by the government throughout the probe.  The benefits of more than 1.23-million recipients of state Medicaid programs, as well as 200,000 elderly and disabled customers, are managed by WellCare. 

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.

Citibank has agreed to a settlement with the state of California for violating that state’s False Claims Act and illegally “sweeping” more than $14 million from its customers’ accounts into its general fund.  The unlawful behavior was uncovered and brought to light by a whistleblower within the company, who was later fired after discussing the wrongful practice with an internal audit team. According to the Central Valley Business Times, which reported the settlement on August 26, 2008, Citibank will pay back all the funds it stole from its customers with 10 percent interest. In addition, the company will pay $3.5 million to the state of California for damages and civil penalties. More than 53,000 customer accounts were affected by the practice. 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.

On August 5, 2008, Science Applications International Corporation (SAIC) was found liable for violating the False Claims Act and breaching a contract with the U.S. Nuclear Regulatory Commission (NRC). The NRC News reports that the United States was awarded $1.97 million in damages, which, under the False Claims Act, are tripled to $5.91 million. In addition, SAIC will pay penalties ranging from $5,000 to $10,000 for each of the 77 false claims and statements they made. 

The jury found that SAIC failed to avoid and disclose conflicts of interests it had while assisting the NRC create a rule governing whether radioactive materials from nuclear facilities be released or recycled.  The conflicting relationships between the SAIC and businesses that stood to profit from the false claims were brought to light by a private citizen at a public meeting held in November of 1999, and the NRC terminated the SAIC’s contract soon thereafter.  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.

The U.S. Department of Justice reported the settlement of a False Claims Act case against Pratt & Whitney and a subcontractor, PCC Airfoils on August 2, 2008.  Pratt will pay $52.325 million for supplying faulty F-15 and F-14 turbine blades to the United States Air Force. According to the U.S. Department of Justice, the blades, which Pratt drilled, finished, coated and supplied, “failed to meet a critical design dimension.”  PCC Airfoils LLC of Ohio, who cast the blades, will pay $2 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.

On July 29, 2008, the St. Louis Business Journal reported the seizure of $24.2 million worth of unapproved drugs from a KV Pharmaceutical Company warehouse in St. Louis.  Food & Drug Administration inspectors found that KV was not complying with an enforcement notice requiring drugs in time-release format containing guaifenesin to be approved in order to ensure safe and effective release of the active ingredients. The majority of the products seized were manufactured after the FDA required an end to their production. In addition, the inspectors found the company was manufacturing and distributing other unapproved drugs, such as products for cough, cold, topical wound healing, skin bleaching and gastrointestinal conditions. 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.

The U.S. Department of Justice reported on July 26, 2008, the settlement of a False Claims Act case against CoxHealth of Springfield, Missouri.  Cox improperly billed and received payments from the Medicare trust fund, and agreed to pay $60 million to the United States in compensation.  It was also alleged that Cox provided kickbacks to physicians of the for-profit Ferrell-Duncan Clinic Inc.  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.

On August 11, 2008, the Department of Justice announced a $2.1 million settlement to be paid by BlueCross BlueShield of Tennessee (BCBS-T) to the United States. BCBS-T, which operates as Riverbend Government Benefit Administrators, agreed to the settlement in response to allegations of its violating the False Claims Act. 

The allegations against BCBS-T came in response to the company’s failure to modify the cost-to-charge ratios of hospitals in the state of New Jersey, for which it is the primary Medicare Part A Fiscal Intermediary (Part A Fiscal Intermediary’s are private insurance companies that manage Medicare claims). Because the cost-to-charge ratios were not conducted in a timely manner, many medical facilities were given excessive “outlier payments,” or supplementary reimbursements for unusually high-costing care, by Medicare.

“Today’s settlement demonstrates that the Justice Department will be vigilant in protecting the Medicare program from all who abuse it, including contractors that falsely bill for crucial tasks that they do not perform,” said Gregory G. Katsas, Assistant Attorney General of the Civil Division.

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.