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Whistleblower Law Collaborative & Our Client Help the Government Recover $13.5 Million For Healthcare Fraud

Helping whistleblowers report and prosecute fraud can be difficult and exhausting work for both the relators and their attorneys. When doing this work it’s important to celebrate successes. Along these lines, we are thrilled to announce that the United States settled a False Claims Act case brought by our client  against three companies, Medi-Lynx Cardiac Monitoring, LLC, AMI Monitoring, Inc., Spectocor, LLC, and individual defendants who had concocted a scheme to cause unwitting physicians to order their most lucrative services regardless of medical necessity or reasonableness.


As part of their service, defendants utilized an online enrollment portal that steered physicians to select the highest reimbursing monitoring service, even though less expensive monitoring services were often medically appropriate. Through this scheme, defendants submitted, and caused the submission of, false claims to Medicare for unnecessary and unreasonable telemetry services. Under the terms of the settlement, defendants have agreed to pay some $13.5 million to resolve these claims.


Our client, Eben Steele, an employee of AMI/Spectocor, had worked in the industry for many years and believes that healthcare companies should serve their patients’ needs, not line their own pockets. He was “offended by this underhanded scheme. Not only was it overriding the doctor’s judgment about what the patient needed, but it was lining the Defendants’ pockets at the expense of the taxpayer.”  Mr. Steele approached us in late 2013 to see if, together, we could do something to stop this fraud.   After investigating his allegations, compiling his evidence,  and conducting research, we drafted and ultimately filed his Complaint under seal in March 2014 and then served the Complaint along with a statement detailing his evidence on the government.  We then worked with the government over the course of the next three plus years until the settlement.


One of the most important factors in ensuring success for an FCA complaint is filing it in a district where the government prosecutors have the expertise and enthusiasm to ensure success. We filed Mr.  Steele’s complaint in the district of New Jersey, permitting us to work with the excellent office there. We simply cannot overstate the outstanding work of AUSA Bernard Cooney, who prosecuted this case from the beginning with the assistance of AUSA Andrew Caffrey, along with support provided by investigators in the Office’s Health Care & Government Fraud Unit and at the Office of Inspector General of the Department of Health and Human Services.”


Whistleblowers like Mr. Steele are vitally important in the fight against government fraud. Under the FCA, a private citizen-relator who suspects or knows of fraud against the government can act as a whistleblower and file a sealed complaint on behalf of the government. If the case is successful, as it was here, the relator is entitled to a share of the government’s recovery. In this case, after several years of hard work by Mr. Steele, his attorneys, and government prosecutors, our client will receive some $2.43 million for his part in stopping an ongoing fraud against the government was stopped, and helping ensure that government victims were compensated.


We offer Mr. Steele our congratulations and deep gratitude for his efforts on behalf of the government.

Compounders Stick It To TRICARE

We all hear a lot about the abuse of the Medicare and Medicaid systems, as the federal government struggles to contain health care fraud.  We hear a little less about the parallel problem of fraud against TRICARE, the Department of Defense’s health insurance program for the members of our military services and veterans and their families.


But it’s the same sport.


Government reimbursement systems are, for the most part, honor systems.  And like all honor systems, they are easily gamed.  Because claims are presumed valid and paid, and only chased later if determined to be improper (“pay and chase”), it’s an attractive world in which to do business for the ethically challenged.


This article, which appeared in the Wall Street Journal on November 9, 2015, is yet another example of how big the problem is and how important whistleblowers are to combating it.  It seems that compounding pharmacies, about which we’ve written quite a lot on this blog, have targeted TRICARE beneficiaries “because the program was known to reimburse compounded drugs more generously than other federal health programs like Medicare,” according to the article.


Talk about the cart leading the horse.  Instead of a patient-focused program (who out there needs our product?), these firms paid heavy bonuses to sales teams to target military members and their spouses because they knew TRICARE was more generous — or, shall we say, less alert to such scams.


A nickel here, a nickel there, this huge increase in compounding pharmacy prescriptions is the “primary driver” in the military’s $1.3 billion budget shortfall.  Ouch.  That’s a lot of compounding cream.


Thankfully, there are people drilling down on this problem, and it sounds like there will be more than civil damages sought.  Because of apparent kickbacks used in the promotion of the drugs, there may well be criminal indictments as well.


None of these efforts to stop the bleeding would have happened without whistleblowers coming forward and alerting law enforcement.  They are the ones risking their careers to set the record straight and get the problem fixed.  More power to them.

Report Showcases Value of Government and Whistleblowers’ Health Care Fraud Fight

A report issued today by Taxpayers Against Fraud Education Fund (TAFEF) shows that for every $1 the government spends on health care fraud law enforcement, $20 is recovered. Over the last several years, the public private partnership under the False Claims Act qui tam provision has fueled rising numbers of health care fraud cases and record levels of recoveries in civil damages and civil and criminal penalties and forfeitures that makes this return on investment possible.


The importance of the False Claims Act, the increased efforts by the government, and the contribution of whistleblowers, was promoted today in a statement by Senator Grassley, one or the sponsors of the 1986 amendments to the FCA that paved the way for increased enforcement.  The report is worth a close read by anyone interested in the fight against fraud and the role whistleblowers are playing.