 Rebate
Records Protection
In response to pressure from Senator
Charles Grassley (R-IA), Taxpayers Against
Fraud, and federal and state law enforcement
officials, the Center for Medicare and
Medicaid Services (CMS) has published a rule
finalizing a 10-year recordkeeping
requirement for drug companies participating
in the Medicaid drug rebate program.
>> To read TAF's
comments
>> To view the final
rule
|
 Whistleblowers
Profiled
The Associated Press ran an exemplary profile
of False Claims Act whistleblowers which
appeared in The New York Times, USA
Today, Philadelphia Inquirer, Miami Herald,
Los Angeles Times, and more than 60
other newspapers across the U.S. Among those
profiled were James Alderson (Columbia-HCA
and Quromum Healthcare), John Schilling
(Columbia-HCA and KPMG), and Joe Gerstein
(TAP Pharmaceuticals).
>> To
read more
|
 Custer
Battles Case on NPR
The Custer-Battles fraud case was
recently featured on National Public Radio's
"Morning Edition". Among those
interviewed were the relators in the case,
attorneys representing both the
whistleblowers and Custer Battles, and a
representative from TAF. To hear the intervew
on your computer >> Click
here.
|
 Diebold
Says It Will Pay $2.6 M
Diebold Inc. has said it will pay
$2.6 million to settle a lawsuit brought by
the state of California charging the company
with making false claims about the security
and certification status of its electronic
voting machines. As a result, six counties
were misled into buying the machines.
California has already spent more than $139
million on voting machines from Diebold and
three competitors. The Alameda County Diebold
contract alone was worth $19 million. It
remains to be seen whether the lawsuit's
originators, Bev Harris and Jim March., will
agree to the settlement. >> To read more
|
 TAF
Launches New E-Newsletter
The False Claims Act Update & Alert
is a FREE, short, easy-to-read email
newsletter that provide headlines, a few
summary lines of text, and links to articles
about the False Claims Act. >> Click
here to subscribe. You
may unsubscribe at any time, and your email
address will not be shared.
|
 PolyMedica
To Settle for $35 Million
PolyMedica reports it will pay $35
million to settle fraud charges made by the
U.S. Department of Justice. The government
charged PolyMedica, and its Liberty Medical
Supply subsidiary, with shipping
diabetes test strips to people who didn't
order them and not reimbursing Medicare for
returned packages. Liberty Medical is a major
TV advertiser of diabetes products. >>
To read more
|
 $2.2
M Loma Linda
PATH Fraud
A group of faculty practice
corporations affiliated with Loma Linda
University has paid the United States $2.2
million to resolve allegations they submitted
false claims to Medicare. The settlement was
paid after 20 corporations reached an
agreement to conclude a federal fraud
investigation. >> To read more
|
 Adventist
Settles for $20.3 million
Adventist Health System, Sunbelt Healthcare
Corporation, three affiliated hospitals and a
management company that administered
ambulance operations at the three hospitals,
have agreed to pay the U.S. $20.3 million to
settle allegations they overcharged Medicare
for ambulance service that was not medically
necessary. >> To
read more
|
 End
of Whistleblower Double Taxation
The International Tax Act has
been signed into law by President Bush. Prior
to passage of the Act, False Claims Act
whistleblowers and litigants in Civil Rights
cases were required to pay taxes on
"phantom income" that actually went
to their lawyers and which was then taxed a
second time.
>> To
read Sen. Grassley's press release
>> To
read the new law
|
 Supreme
Court Takes Up Tax Case
The International Tax Act put an end
to double taxation of future relator awards.
In the Banks and Banaitis case, the Supreme
Court will rule on the legality of double
taxation in pre-enactment cases.
>> To
read the TAF amicus curiae brief
>> To
read about Supreme Court argument
|
 Money
on the Table
The FY 2004 U.S. Dept. of Health and
Human Services "Red
Book" identifies almost $23
billion a year in unimplemented savings
suggested by HHS's Office of the Inspector
General. Among the potential savings listed:
$400 million a year if CMS reimbursed for
power wheelchairs at the median retail rate
and adhered to coverage criteria. Other
potential savings: $263 million a year
through "improved medical reviews of
Home Oxygen Therapy" and $1 billion a
year if "Medicaid reimbursements for
brand name drugs were more in line with
acquisition costs."
|
 McKesson
Pays $7.4 M
McKesson's TBC Products unit
has pled guilty to federal fraud charges
stemming from an undercover Medicare
investigation in southern Illinois. The
settlement includes a $3.4 million settlement
under the False Claims Act, and a $4 million
criminal penalty. TBC Products gave clients
invoices that made it look like McKesson was
charging for tube-feeding pumps that were
free. This paperwork made it possible for
nursing homes to bill taxpayers for the free
pumps. >>
To read more
|
 Titanium
Fraud at Boeing
Boeing has agreed to pay $6 million
to settle False Claims Act charges that it
delivered military aircraft to the U.S. that
contained parts made with Russian titanium.
Federal law required parts made for the F-15
Eagle and the F/A-18 Hornet fighters be made
entirely of domestic titanium.
|
 TAP
Faces Prevacid Suit
Dr. John LaCorte, a physician specializing in
care of the aged, and a successful
whistleblower in a $182 million Laboratory
Corporation of America case, has sued TAP
Pharmaceuticals for multiple frauds
surrounding Prevacid, an ulcer medication
which accounts for over $3 billion a
year in sales. According to LaCorte,
TAP lied about the "best price" of
Prevacid, selling the drug to hospitals for
24 cents a tablet while billing Medicaid
$3.20 per tablet for the same
drug. >> To
read the complaint
|
 The
Next Big Wave of Fraud Cases?
A whistleblower lawsuit against the world's
leading maker of syringes has revealed a
larger probe by the U.S. Department of
Justice into Group Purchasing Organizations,
or GPOs. The DoJ investigation appears to
focus on Novation, the largest GPO, and the
fees paid to it by drug companies and
equipment manufacturers. More than a dozen
medical-supply companies have received
subpoenas, including Merck, Bristol-Myers
Squibb, G.E. Healthcare, and Cardinal Health.
GPO's supply hospitals with everything from
bedpans to x-ray machines, and Novation alone
sells about $20 billion a year in medical
products and services. >> For
more information.
|
 Whistleblower
Law Returns
$13 for Every $1 Invested
A report authored by economist Jack Meyer and
released by the TAF Education Fund calculates
that every dollar invested by the government
in investigation and prosecution of federal
health care fraud through the False Claims
Act returns $13 back to the American people.
>> To
read the press release (PDF
format)
>> To
read the complete report
>> To
see the graph
|
 GAO:
CMS Needs to Focus on Medicaid
A new report by the the
Government Accountability Office (GAO) says
state Medicaid programs are losing
"substantial" amounts of money to
fraud and that the Center for Medicare and
Medicaid Service (CMS) is not investing
enough resources to stem the theft. The GAO
found that CMS had just eight dedicated staff
positions to oversee all state fraud control
units. Federal and state Medicaid spending is
projected to top $300 billion for FY 2004.
>> To read the
report
|
 Medicaid
Fraud Control: Bang vs. Bucks
In FY 2003, the Federal government granted
$119.83 million to 47 state Medicaid Fraud
Control Units, and these units won $268.48
million in recoveries. Of the 47 states,
however, 19 did not recover as much money as
their offices actually cost to operate.
States with the most cost-effective MFCU
units were New Jersey, North Carolina, Texas,
and Virginia >> To
read the 2000 annual MFCU report.
|
 Pfizer
Settles Neurontin for $430 Million Pfizer
has settled the Neurontin drug case
for a total of $430 million, of which $152
million will settle the False Claims Act
aspects of the case, and an additional $240
million represents criminal penalties.
Another $38 million will go to state
consumer-protection agencies."
>> Complaint
>> DoJ
Press Release
>> Settlement
>> Corporate
Integrity Agreement
(PDF)
|
 Schering-Plough
To Pay $345
Million for Claritin Medicaid Fraud
Schering-Plough has agreed to pay $345
million to settle the first of what are
expected to be several major False Claims Act
cases. The current settlement deals with
Schering-Plough illegally charging Medicaid
more than private customers for the allergy
drug Claritin. The whistleblower's share in
the current Schering-Plough case is
$31,662,173 to be split between the three
relators and their attorneys. One hundred
percent of this amount will be paid by
Schering-Plough; not a dime comes from the
U.S. Treasury. >> To
read the complaint
>> To
read the settlement
|
 Power
Wheelchair Fraud Update
The Scooter Store, a company currently under
investigation by the FBI, has announced that
power wheelchair sales are down 50 percent
from 2003. This is good news, as there was a
450% increase in Medicare-funded power
wheelchair claims between 1999 and 2003. Over
50 power wheelchair investigations are now
underway across the U.S.
|
 The
False Claims Act Process in Brief
A very nice 3-page summary of
the False Claims Act process can be
found on the web site of the U.S. Attorney's
Office for the Eastern District of
Pennsylvania. >> Click
here to read more
|
 Health
Care Fraud by Sector
The U.S. Centers for Medicare and Medicaid
Services (CMS) reports that the error rate
for fee-for-service Medicare claims has
declined from 13.8% in 1996 to 6.3% in 2001,
and 5.8% today. The error rate is based on a
close examination of 6,000 randomly-selected
claims. CMS found the greatest
"error" rate was by physical
therapists (18.2%), followed by internists
(13.5% ), and chiropractors (11.3%). If a 5%
error rate holds true across the entire $1.7
trillion U.S. health care sector, then $85
billion may be lost to medical "billing
error" every year. >> For more information
|
 The
Truth About the Drug Companies
Marcia Angell, M.D., former Editor-in-Chief
of The New England Journal of Medicine and
now Senior Lecturer in Social Medicine
at Harvard Medical School, has put out a new
book entitled The Truth About the Drug
Companies: How They Deceive Us and What To Do
About It. The book spotlights tactics
big drug companies use to generate
sales. You can read a review of the
book here, and
an interview here.
|
 Travelers
& United Healthcare Settle Medicare Fraud
Case or $20.5 Million
Travelers Insurance Co. and United Healthcare
Insurance Co. have agreed to pay $20.6
million to settle a civil suit by the U.S.
government accusing them of cheating the
federal Medicare program which they were
supposed to be helping administer. During the
investigation, the Government discovered the
companies kept two sets of books and lied
about their costs.
|
 San
Francisco Wins Two for the Kids
San Francisco's school system has
won its second False Claims Act suit in as
many months, this time racking up $43.1
million. The current suit was won against
Strategic Resource Solutions, which was
supposed to install and monitor
energy-efficient heating and cooling
equipment, but none of it worked. Because of
the False Claims Act victories, the San
Francisco School District will avoid layoffs,
re-hire staff that had been let do,
reinstates a $200 per teacher supply grant
for teachers, and make all school sites
compliant with the federal Americans with
Disabilities Act. The previous fraud win, for
$3 million, involved the E-rate program.
>> For more information.
|
 Why
the FCA is Needed
In a recent letter to 19 of the top
20 drug companies by sales in 2003, Sen.
Grassley asked whether or not the drug
companies would voluntarily provide basic
information about the False Claims Act (FCA)
to their employees. Sen. Grassley reports
that he was "pleased and somewhat
surprised, by those drug companies that
responded positively to my letter,"
noting that one drug company said it was
already doing so as part of its compliance
program, and that another intended to include
information about the FCA in a course they
would begin teaching in 2005. Alan Holmer,
President of the Pharmaceutical Research and
Manufacturing Association, the drug
industry's trade association, was a little
less pleased that Grassley was asking about
company efforts to educate about the FCA,
saying that employees should first report
frauds to company officers. A review of the top
drug cases to date,
however (TAP, Astra-Zeneca, Schering-Plough
and Bayer) reveals that these frauds were
well-known by company management and were, in
fact, part of the business strategy.
>> To
read the exchange of
correspondence between Sen. Grassley and Mr.
Holmer.
>>To
read TAF's letter to Mr. Holmer
|
