False Claims Act Update & Alert |
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Taxpayers
Against Fraud Education Fund | Washington, D.C. | WWW.TAF.ORG |
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 SAIC Duels With Air
ForceScience Applications International Corp., a contractor specializing in information technology, is under fire from the Department of Justice and the Air Force for alleged violations of the Truth in Negotiations Act (TINA) which requires government contractors to provide accurate pricing information to federal clients. The Justice Department joined in the lawsuit last September and filed court documents that detail that the bill padding was approved in SAIC's corporate headquarters in San Diego. On February 11, Judge William Wayne Justice of the Federal District Court in San Antonio denied the company's motion to dismiss the suit. Four months into the one-year contract award, according to internal company documents, the effective profit had risen to 29 percent. By the end of 2000, when the work was completed, the company found - and did not disclose to the Air Force - that its profit has risen to 54%. >> To read more |
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 Repeal Medicaid Best
Price?The Bush Administration has said it wants to "amend" the Medicaid drug rebate formula by getting rid of current best price requirement, but the vague language from the White House seems to acknowledge that the real purpose is to allow "private purchasers to negotiate lower drug prices" without giving Medicaid the same benefit. Notes TAF President Jim Moorman, "The notion that the Federal Government -- the largest purchaser of prescription drugs in the country -- should pay more than Wal-mart is absurd, but that will be the result, and at a time when we need to control Medicaid costs." >> To read the White House / OMB budget language |
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 Medicare Billed for
Faith Hill HealthSouth Corp. billed Medicare for performances by such big-name musical groups as Faith Hill, Reba McIntire, Alabama, KC. and the Sunshine Band, and Amy Grant. Musical entertainment was a regular feature of HealthSouth annual meetings held in Orlando every year, with some meetings costing over $3 million. The cost of the bands was lumped into "home office cost statements," submitted to Medicare for payment. >> To read more |
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 Caremark Faces Rising
TroublesCaremark seems to be facing a rising tide of troubles. The pharmacy benefits management company lost a $400 million contract with Illinois last week after it was disclosed, in a False Claims Act lawsuit in Florida, that the company illegally sold returned drugs to state customers. Meanwhile, in Tennessee, the Feds are seeking to recover millions of Medicaid dollars from Caremark which should have been paid by private insurance companies. >> To read more |
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 Faked Research Kills The DoJ has reached a settlement in a case stemming from a University of Pennsylvania gene therapy study that ended with the death of an Arizona teenager. University of Pennsylvania researchers lied to the National Institute of Health and other federal agencies about tests that showed toxicities in test subjects. Jesse Gelsinger died as a result. The DoJ settlement is described as "a model enforcement action" because it includes both individual researchers as well as research institutions. >> To read the DoJ press release on the settlement (PDF) |
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 Stonewalling on
Uniform Fraud DoJ lawyers have accused Cintas Corp. of refusing to hand over records in an investigation of possible price-gouging for uniforms supplied to the military, postal service, and other federal agencies. The DoJ says that the company has repeatedly stonewalled a subpoena for documents, and is seeking an order from U.S. District Judge S. Arthur Spiegel to force the company to comply. Cintas is publicly traded, and had $2.81 billion in sales and $272 million in profits last year. >> To read more |
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 OPI to Pay Nearly $50
MillionOPI, a subsidiary of Novartis, has agreed to pay nearly $50 million in criminal and civil fines to settle claims it violated Medicare's anti-kickback rules. OPI was nailed as part of an 18-month sting, dubbed "Operation Headwaters," in which the Feds set up a fake company buying medical goods. OPI will pay a criminal fine of $4.5 million and a civil penalty of $44.6 million. So far, Operation Headwater cases have brought in more than $670 million in civil and criminal fines. >> To read more |
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