At a panel on Thursday, June 3, 2010, the Deputy Director of the Commercial Litigation Branch of the Department of Justice’s Civil Division, Michael Granston, announced that he expected Congress to enact changes to the Program Fraud Civil Remedies Act of 1986. Also known as the “mini False Claims Act,” the PFCRA enables the government to recover up to $150,000 in administrative proceedings and permit a person to be made to pay up to $5,000 per claim and double the amount falsely claimed.
On Thursday, June 3, 2010, Senior U.S. District Judge Matthew J. Perry, Jr., ruled that Tuomey Healthcare System, based in Sumter, South Carolina, must pay $44,888,651 plus interest received from Medicare under physician contracts in violation of the Stark Law. This ruling from Judge Perry follows the March 29 jury verdict where a federal jury found that the hospital violated the Stark Law,
On Friday, June 4, 2010, the Department of Justice announced that three entities, St. Jude Medical, Inc., a heart device manufacturer; Parma Community General Hospital; and Norton Healthcare will pay the United States $3,898,300 in response to allegations that St. Jude paid illegal kickbacks to two hospitals to secure heart-device business.
On May 30, 2010, the Dallas Morning News brought to light allegations of decades of Medicare and Medicaid billing fraud at the prestigious University of Texas Southwestern Medical Center and its affiliated Parkland Memorial Hospital. The report provided examples of the systemic allegations, including medical residents performing surgeries such as appendectomies and even a leg amputation without faculty or attending physician supervision.
The State of Idaho has agreed to settle claims against two groups of the Actavis pharmaceutical company related to allegations that Actavis knowingly inflated reported wholesale prices of certain drugs in order to receive extra compensation from the State’s Medicaid program. For $1.2 million, the two Actavis companies will be released from a lawsuit that was filed in 2007 by the State’s Attorney General against them and other pharmaceutical companies,
On May 24, 2010, an Irvine physician, Xinming Fu, was sentenced for his role in a scheme which bilked Medicare out of $15 million in unnecessary respiratory treatments which were not performed in accordance with the Medicare rules or not performed at all. Dr. Fu, who was sentenced to thirty (30) months in federal prison,
On March 26, 2010, the U.S. Department of Justice announced that Bell Helicopter Textron, Inc. (“Bell”) will pay the United States an additional $3,718,770 to resolve several claims arising from cost charging practices on its contracts with the U.S. government. This additional amount brings the total money to be paid by Bell to $16,570,018.
Ceradyne, Inc., a subcontractor for Sikorsky Aircraft, agreed to pay the federal government $1.2 million to settle a False Claims Act suit for failing to ballistically test armor plating installed near the pilot and co-pilot in Black Hawk helicopters. Ceradyne’s settlement comes a little over a year after Sikorsky itself paid $2.9 million to resolve False Claims Act allegations stemming from the same inadequate armor plating.
Robert Wood Johnson University Hospital has agreed to pay $6.35 Million to settle allegations of violations of the False Claims Act. The suits alleged that the Hamilton, New Jersey hospital fraudulently inflated its charges to Medicare patients to obtain larger “outlier payments.” Congress enacted the supplemental outlier payments to ensure that hospitals have incentives to treat patients whose care requires unusually high costs.
Minnesota’s False Claims Act, which will take effect July 1, 2010, differs from its federal and other state counterparts in several key respects that may have a chilling effect on qui tam actions in this state. Whether it’s “Minnesota nice” or an effective deterrent against fraud remains to be seen.
