The more medical companies become dependent on income from the federal government and products such as Medicare, the more frequent health care fraud seems to become. Another case involving alleged violations of the False Claims Act has been settled with a biotech company paying nearly $25 million to the federal government to settle allegations it paid kickbacks to its pharmacy providers.
Whistleblowers continue to find success by using the False Claims Act to report health care fraud, enabling government attorneys to pursue companies and individuals for damages for Medicare fraud -- and financially rewarding the whistleblowers who took the initiative to report the improprieties.
When it comes to health care fraud, whistleblower suits are a crucial part of keeping the system fair and making sure that people who are courageous enough to come forward with wrongdoing that they have witnessed. The False Claims Act helps to protect these whistleblowers and has done so for the last 150 years.
When large settlements or verdicts are announced as a result of whistleblower suits, it's a sign of our democracy in action. We wrote recently on this blog about the 150th anniversary of the False Claims Act, which was signed into law by Abraham Lincoln. Cases continue to come up to this day that show how the act is a valuable weapon to help stamp out corruption and fraud.
A frequent theme of the posts on this blog is that we all end up paying the real cost of healthcare fraud. When people cheat the system to line their own pockets, you, me, the rest of Boston and, indeed, the rest of the nation are the ones who end up footing the bill.
My seminar course on Health Care Fraud & Abuse ended last week with two final guest speakers addressing the defense perspectives on False Claims Act practices and two courtroom victories in this field. Having heard the whistleblower perspectives, the prosecutor's perspectives, and the thoughts of in-house compliance personnel, the students were treated to an outstanding presentation by two Ropes & Gray attorneys, partner Josh Levy and associate Holly Caldwell, who spoke about their experiences in the Lauren Stevens obstruction of justice case and the Stryker Biotech criminal off-label trial. [See OPINION re Stevens.pdf and Stryker article (01-26-12).pdf.]
The False Claims Act whistleblower allegations of health care fraud against WellCare Health Plans that resulted in a $137.5 million settlement between DOJ, 9 state AGs, WellCare, and four whistleblowers in April of this year [see press press release.pdf, WellCare DOJ PR.pdf, Healthcare Finance.pdf] will be in the spotlight again in January 2013. That is when the federal criminal trial against five former executives of WellCare gets underway in Tampa, Florida; among the defendants are the CEO, the CFO, and the chief compliance officer and general counsel. There are many story lines in this tale of greed and fraud that went "undetected" by federal and state regulators and law enforcement for years despite the phenomenal profit WellCare was posting and the run up in its share price. Perhaps the foremost lesson is that but for the whistleblower(s), the fraud might never have been caught and stopped. While the government did not recover anywhere near its true losses in the FCA settlement and the Deferred Prosecution Agreement, in part because of WellCare's supposed "inability to pay", at least it recovered some money and garnered WellCare's cooperation in the feds' ongoing criminal investigation and prosecution of individual WellCare executives.
Inevitably in the course of a False Claims Act case, a defendant will withhold documents that are responsive to a subpoena or court discovery on the grounds of "attorney client" or "attorney work product" privilege. The usual playbook calls for the defendant to assert these privileges broadly, rubber-stamping documents "privileged" or "confidential" without regard to the law of privilege, all in order to shield some of the most damaging evidence (for example, of scienter) from being discovered. This month the government and whistleblower counsel won two important court victories that limit defendant's playbook.
A doctor in Utica, New York, has been accused of scamming Medicare, Medicaid and private insurers for as much as $12 million.
One of the country's most respected universities and its affiliated hospital have been sued under the Federal False Claims Act for alleged double-billing.