News & Cases


Southwest Orthopaedic Specialists, an Oklahoma City Hospital, and a Hospital Management Company Will Pay $72.3 Million Over Anti-Kickback and Stark Law Violations

Southwest Orthopaedic Specialists, an Oklahoma City Hospital, and a Hospital Management Company Will Pay $72.3 Million Over Anti-Kickback and Stark Law Violations

An Oklahoma hospital, its manager and part-owner, the physician group that created the hospital, and two of the group's physicians will collectively pay $72.3 million to settle claims that they conspired to defraud the federal government and the State of Oklahoma.

The alleged kickback scheme was described in detail in a False Claims Act lawsuit filed against several defendants, including the Oklahoma Center for Orthopaedic and Multi-Specialty Surgery (OCOM), a surgical hospital; USP, a hospital management company; Southwest Orthopaedic Specialists (SOS), a group of orthopaedic surgeons; and two SOS physicians named Anthony L. Cruse and R.J. Langerman.

According to the whistleblower complaint, SOS, OCOM, and USP, the corporation that controls OCOM, conspired to defraud Medicare, Medicaid, TriCare, and Blue Cross Blue Shield Federal....


Novartis Will Pay $678 Million Over Illegal Kickbacks Involving Sham Doctor Events

Novartis Will Pay $678 Million Over Illegal Kickbacks Involving Sham Doctor Events

Novartis has agreed to pay $678 million to resolve allegations that it systematically violated the Anti-Kickback Statute in its marketing of Lotrel, Diovan, Tekturna, Exforge, Valturna, Tekamlo, and Starlix. Prosecutors alleged the drugmaker paid for lavish meals, golfing trips, and purported professional events at Hooters to induce doctors to prescribe its cardiovascular and diabetes drugs. According to the underlying lawsuit, high-prescribing physicians received hundreds of thousands of dollars for speaking at sham professional events.

According to the former Novartis sales representative who filed the complaint, the whistleblower’s former employer paid for nearly 80,000 of these sham events between 2002 and 2011. The Department of Justice later joined the False Claims Act lawsuit to try to recover funds paid by Medicare and other government health care programs for prescriptions tainted by the defendant’s alleged misconduct. The original lawsuit was filed in 2011, and the DOJ joined as a plaintiff in 2013.

The Justice Department’s investigation revealed that Novartis’s sham informational roundtables were often held at expensive restaurants like NYC’s Eleven Madison Park and D.C.’s Charlie Palmer Steak. In reality, prosecutors claimed, the roundtables were an excuse to treat physicians to fancy meals. In many cases, doctors got paid for speaking at events that never happened....


Governor Cuomo Signs Bill to Protect Healthcare Whistleblowers from Retaliation in The Context of The Pandemic

Governor Cuomo has signed an order to strengthen whistleblower protections for New York State’s health care workers. Described as, “An act to amend the labor law, in relation to prohibiting health care employers from penalizing employees because of complaints of employer violations,” New York Senate Bill S8397-A/A.10326 was sponsored by NYS Senator

Diane J. Savino and co-sponsored by NYS Senators Alessandra Biaggi, David Carlucci, Leroy Comrie, and Robert Jackson.

The New York State Senate’s website states that the new legislation “prohibits health care employers from penalizing employees because of complaints of employer violations,” providing “health care workers with greater whistleblower protections in the State of New York, so that patient care can improve and such workers can be safe.”

The act amends New York State’s labor law, creating “a new definition of ‘improper quality of workplace safety,’ where an employee is protected from employer retaliation if they report violations of this category.” Under the amended legislation, employees are also protected from retaliation if they report violations to news organizations or social media....


Florida Nursing Home Residents at Risk as Operators Demand Coronavirus Immunity

Florida Nursing Home Residents at Risk as Operators Demand Coronavirus Immunity

The COVID-19 pandemic has taken a tremendous toll on America’s elderly population. Nursing home residents have been hit the hardest, with 20,000 dead across the country as of mid-May. Many of those people have died due to negligence from staff and administrators. Naturally, families want to sue the culprits. Meanwhile nursing home operators are demanding immunity, often with success.

Prominent Elder Law attorney Brian Mahany explains, “If you live in Florida and watch the news, nursing home administrators are demanding immunity from lawsuits and even criminal prosecution. So far, 16 states have already caved to pressure from well-paid healthcare lobbyists.”

Mahany has it right. States that have passed COVID-19 immunity laws for nursing homes include some of the hardest hit by the pandemic. New York is one of them. As residents get infected and die en masse at facilities all over NYS, legal liability for inadequate care has become a thing of the past. When residents need the highest quality of care to prevent Coronavirus infection, nursing home administrators get a free pass to disregard mandatory care standards....


SEC Whistleblower Receives $27 Million, Total Awards Surpass $430 Million

SEC Whistleblower Receives $27 Million, Total Awards Surpass $430 Million

Despite the slowing down of markets due to the COVID-19 pandemic, April 2020 has been a prolific month for the Securities Exchange Commission. The agency’s Office of the Whistleblower has announced a $27 million award followed by a $5 million award.

Upon the announcement of the $27 million award, the agency hailed it as a milestone for its whistleblower program, which brought the total amount of SEC whistleblower awards “over the $400 million mark.” Up until April 20th, 2020, that number has risen to $430 million, awarded to 80 whistleblowers over eight years. In 2019 alone, the agency received more than 5,200 tips from over 70 countries.

The $27 million award surpassed the SEC panel’s initial recommendation. The agency said in a statement that the award recipient provided information about misconduct “occurring, in part, overseas,” and tried to report internally on multiple occasions before contacting the SEC. The unusually high amount of the award reflected the whistleblower’s “substantial amount of ongoing assistance and cooperation” and the many “critical investigative leads” they provided, the Commission explained....


Guardian Elder Care Will Pay $15.4 Million to Resolve Allegations of Medicare Fraud - Whistleblowers Will Receive $2.8 Million

Guardian Elder Care Will Pay $15.4 Million to Resolve Allegations of Medicare Fraud - Whistleblowers Will Receive $2.8 Million

Guardian Elder Care Holdings Inc. and a list of related entities, including Guardian LTC Management and Guardian Rehabilitation Services (collectively, Guardian), have agreed to pay $15.4 million to settle a False Claims Act lawsuit. According to the complaint, Guardian billed government healthcare programs for medically unnecessary services. The company allegedly defrauded both Medicare and the Federal Employees Health Benefits Program.

Pennsylvania-headquartered Guardian operates over 50 nursing facilities in Pennsylvania, Ohio, and West Virginia. According to the whistleblower lawsuit filed by two rehab managers who worked at a Guardian facility in Carlisle, Guardian caused some of its facilities in all three states to bill the government for medically unnecessary services, at the highest level of Medicare reimbursement, solely to maximize profits.

The whistleblower complaint resolved by the $15.4 million settlement was filed under the False Claims Act (“FCA”). Under the FCA, whistleblowers with original information about a fraud can come forward and become eligible for an award ranging between 10 and 30 percent of any resulting recovery. The two whistleblowers in this case, Philippa Krauss and Julie White, will share a $2.8 million award....


Whistleblower Lawsuits Target Military Contractors Who Funded The Taliban and Other Terrorists Overseas

Whistleblower Lawsuits Target Military Contractors Who Funded The Taliban and Other Terrorists Overseas

In 2016, a New Yorker reporter noted that contractors outnumbered U.S. troops three to one in Afghanistan. Part of the reason for this was that moving around on the ground was so dangerous in Afghanistan that our government basically paid local people to risk their lives, for example, by driving trucks and transporting materials for the U.S. military.

“The jobs were dangerous—more contractors had been killed so far that year than U.S. soldiers—but the payoff was substantial,” The New Yorker stated. “Between 2007 and 2014, the U.S. spent eighty-nine billion dollars on contracting in Afghanistan.”

But in an impoverished war zone, U.S. military contracts have inevitably led to large-scale corruption, and as several lawsuits now allege, the result has often been that our country has indirectly funded its own enemies.

Trucking contractors in Afghanistan, for example, were described in a House Committee report as fueling “a vast protection racket run by a shadowy network of warlords, strongmen, commanders, corrupt Afghan officials, and perhaps others,” adding that “protection payments for safe passage [were] a significant potential source of funding for the Taliban.” ...


Mormon Church Has Turned Donations into a Profitable $100-Billion Fund, IRS Whistleblower Claims

Mormon Church Has Turned Donations into a Profitable $100-Billion Fund, IRS Whistleblower Claims

According to a whistleblower complaint filed last November, the Church of Jesus Christ of Latter-day Saints (the Mormon church) may have defrauded U.S. taxpayers out of billions of dollars. Filed by David A. Nielsen, the lawsuit alleges the church has enriched itself, amassing a fortune of $100 billion from tax-exempt donations instead of using the funds for charitable purposes.

Nielsen was an investment manager for the church in Utah. The identity of IRS whistleblowers is usually kept confidential, but Nielsen apparently wanted to expose his employer; his twin brother sent a copy of the whistleblower lawsuit to The Washington Post.

The church has its own investment division, Ensign Peak Advisors, with offices close to the church’s headquarters in Salt Lake City. Nielsen learned about the alleged misconduct while working as a senior portfolio manager at Ensign.

Members of the church are expected to donate 10 percent of their income to it; this practice is known as ‘tithing.’ The church has about six million members in the U.S., from whom it reportedly collects about $7 billion in donations every year....


Whistleblower: Massive Medicare Fraud at CVS’ Omnicare – Feds: That’s True, We’re Intervening

Whistleblower: Massive Medicare Fraud at CVS’ Omnicare – Feds: That’s True, We’re Intervening

The government has just decided to intervene in a whistleblower’s False Claims Act lawsuit against Omnicare. The relator’s (whistleblower’s) complaint includes multiple allegations of Medicare and Medicaid fraud by the pharmaceutical services provider.

The whistleblower who initiated the case is an Omnicare pharmacist.

The whistleblower alleges that Omnicare used an automated prescription filling system to fulfill prescriptions that had not been authorized by a physician. Omnicare’s computer system, called Cycle Fill, allegedly allows for prescriptions to be renewed even after the cycle prescribed by the treating doctor has run out. So, if a doctor has prescribed a drug for a two-month cycle, Omnicare’s systems allow for the prescription to be renewed past that period, without requiring a re-assessment of the patient’s needs or a new prescription.

Administering medication that has not been prescribed by a physician not only triggers inappropriate and fraudulent Medicare and Medicaid reimbursements, but also it can put patients at serious risk....


Sutter Health to Pay $45.6 Million to Settle Illegal Kickback and Medicare Fraud Claims, Whistleblower Receives $5.9 Million Award

Sutter Health to Pay $45.6 Million to Settle Illegal Kickback and Medicare Fraud Claims, Whistleblower Receives $5.9 Million Award

On November 14, Sutter Health agreed to pay $30.5 million to settle a whistleblower lawsuit over anti-kickback violations. One day later, the California healthcare provider agreed to pay another $15.1 million to resolve a separate Medicare fraud lawsuit.

The $30.5 million settlement resolves allegations that Sutter Health paid illegal kickbacks to doctors in exchange for patient referrals. The complaint that initiated the government’s investigation was filed by a compliance officer who first attempted to raise concerns about the misconduct internally.

The additional $15.1 settlement resolved allegations that Sutter Health illegally billed Medicare for services referred by doctors who were receiving kickback payments and double-billed the government program for certain services.

“The Stark Law prohibits a hospital from billing Medicare for certain services referred by physicians with whom the hospital has a financial relationship, unless that relationship satisfies one of the law’s statutory or regulatory exceptions. . . The law is intended to ensure that medical decision-making is not influenced by improper financial incentives and is instead based on the best interests of the patient,” a spokesperson for the prosecution said....