False Claims Act Update & Alert
Taxpayers Against Fraud Education Fund | Washington, D.C. | WWW.TAF.ORG May 10, 2005
		Sign Up for this FREE Newsletter n Previous Newsletters n TAF Home Page n About TAF-EF n The False Claims Act n Email editor Please take a moment to forward this FREE electronic newsletter to others that might be interested!                Quote of Note "There is no kind of dishonesty into which otherwise good people more easily and frequently fall than that of defrauding the government. "   - Benjamin Franklin
			Texas A.G. Sues 12 Drug Companies Texas Attorney General Greg Abbott has filed suit against 12 drug manufacturers for ignoring a three-year-old state law that requires the companies to report the average manufacturer price (AMPs) of Medicaid-covered drugs.  The Attorney General sent letters to 160 companies, notifying them of the requirement to file AMPs, and the 12 companies that did not respond are named in the lawsuit. >> To read the Texas AG Lawsuit
			Fraud "As Seen on TV" Marc Racicot, former Governor of Montana, former Chairman of the Republican National Committee, and former Chairman of the Bush-Cheney Re-election Committee, is now defending The Scooter Store from the onerous task of providing documents to Medicare and Medicaid related to the sale of 1,000 motorized wheel chairs.  Racicot says the company may fold if CMS denies the claims.  >> To read more
			The Fleecing of America NBC's Nightly News' "Fleecing of America" segment for May 4 featured the SAIC bill-padding case recently settled for $2.5 million.  NBC noted that Lockheed Martin, Northrop Grumman and Raytheon had also settled whistleblower lawsuits alleging bill padding.  Charles Tiefer of the U. of Baltimore Law School told NBC, "The contractors have found that if they inflate their costs and they keep their cards face down, they're just not caught.... We're talking about billions of dollars in contracts every year."  >> To read the transcript
			Chicago Hospital Suit Leads to Arrests Two high-ranking Chicago executives have been indicted and arrested on kickback and influence-peddling charges.  The investigation was sparked by a federal whistleblower lawsuit filed under seal which claimed two Chicago businessmen used ties to the Illinois Health Facilities Planning Board to try to secure business. Pamela Davis, the CEO of Edward Hospital and William Kottman, the Vice President of Edward, are the whistleblowers in the case and are represented by Chicago attorney Robin Potter and Marion, Illinois Attorney Ronald E. Osman. >> To read more
			Marketing-the-Spread Cons On January 3, 2003 a California False Claims Act case against Abbott Laboratories and Wyeth came out from under seal.  The case was originally filed in July 1998, and charged the two pharmacy companies with systematically defrauding California’s Medicaid program by inflating prices for various drugs in order to "market the spread" -- a common "business plan fraud" in which drug companies report an entirely fictitious "Average Wholesale Price" to Medicaid while selling the drugs to WalMart, CVS, Walgreens and other national chains at deeply discounted prices.  How big are the spreads?  One only has to look at the example of Vancomycin, an antibiotic sold by Abbott and named in the California False Claims Act suit.  Between January 5, 2001 and June 1, 2002, the Direct Price (supposedly the manufacturer's direct price to the pharmacy) reported by Abbott and paid by the California Medicaid program dropped from $64.35 to $5.76, while the "spread" dropped from $56.95  to just $1.40. What was the cause of this price adjustment?  It is speculated that the rapid collapse in the price reported to Medicaid was due to the fact that Abbott got wind of the California False Claims Act lawsuit and decided to "run clean" rather than incur more liability.  To learn more about marketing-the-spread fraud scams, see TAF's publication >> Reducing Medicare and Medicaid Fraud by Drug Manufacturers by Andy Schneider.
			Beth Israel Hospital Case Under Seal?Crain's Business Daily has reported that Beth Israel Medical Center in New York has agreed to pay at least $58 million to Medicare and Medicaid to settle charges it improperly billed the programs from 1995 to 2000, but a final settlement remains to be worked out, as possible criminal charges and further investigations are being looked at.  Crain reports that the cost to the hospital could be considerably higher if additional penalties are included. >> To read more
			STORIES WE ARE WATCHING
			l Medco Healthcare l Caremark in TN & TX l Caremark Florida l ExpressScripts l Abbott in CA l Serono l FL AG Pharma Suits l Pratt & Whitney l AstraZenaca marketing l King Pharmaceuticals l Mylan, Roxane, Dey l Pfizer and Zoloft   l Merck in NV l Beth Israel Hosp. l Fresenius l Gambro l Davita l Custer Battles l Cintas Corp. l Tenet Healthcare l Genentech l Prevacid l Scooter Store l Orthopedic Frauds