Healthcare and Pharma Cases


Government Joins Seven Whistleblowers in $50 Million Lawsuit Against Sen. Steve Dickerson and CPS Pain Clinics Over Fraudulent Urine Test Billings

Government Joins Seven Whistleblowers in $50 Million Lawsuit Against Sen. Steve Dickerson and CPS Pain Clinics Over Fraudulent Urine Test Billings

In November 2017 a Bloomberg headline ironically advised, “Want to turn that pain clinic into a real moneymaker? Open your own urine-testing lab and start billing Medicare.”  

Back in July of 2016, when neither the public nor the authorities were aware that certain pain clinics executives were referring to these pricey urine tests as “liquid gold,” the CEO of Tennessee’s Comprehensive Pain Specialists (“CPS”) said in a press release, “Since January, CPS has seen a 19% increase in referrals from Primary Care Physicians. . . . By taking a seat on a patient’s care team, CPS is able to work with their physicians to address both the cause and the treatment of their pain. Putting patients on long term pain medication certainly isn’t the goal.” 

While the press release included ‘politically correct’ statements about “treating the epidemic of chronic pain without escalating the epidemic of opioid misuse,” it didn’t shy away from boasting of the potential for large profits resulting from the passing of the Comprehensive Addiction and Recovery Act (“CARA”).

Prosecutors now believe CPS, which operated its own lab, did exactly what Bloomberg advertised, and with the help of a senator....


Beaver Medical Group and One of Its Doctors Will Pay $5 Million to Resolve Medicare Advantage Fraud Allegations

Beaver Medical Group and One of Its Doctors Will Pay $5 Million to Resolve Medicare Advantage Fraud Allegations

California-based Beaver Medical Group and Dr. Sherif Khalil have agreed to pay $5 million to settle allegations that they conspired to defraud Medicare by providing false information about individuals participating in the Medicare Advantage program.  

Medicare Advantage Organizations (“MAOs”) provide comprehensive health care services to individuals enrolled in Medicare Advantage. Medicare pays them a fixed amount per individual, depending on the state of the beneficiaries’ health. The sicker the Medicare beneficiaries, the higher the payments. If they provide false diagnoses to Medicare, healthcare providers can illegally boost their profits.  

Beaver was under contract with numerous MAOs in California. According to the allegations, the company falsified diagnoses to boost the MAOs’ Medicare billings. The MAOs would then share some of those profits with Beaver, thus creating an illegal financial incentive, the DOJ said. Dr. Khalil was allegedly part of the scheme, as some of the false diagnosis records bore his signature. After analyzing the evidence, the DOJ found that there were no patient records or tests results to substantiate many of the diagnoses submitted by the MAOs....


Eagleville Hospital Will Pay $2.85 Million to Resolve Allegations of Medicare and Pennsylvania Medicaid Fraud Involving Fraudulent Billing

Eagleville Hospital, a provider of substance abuse treatments to beneficiaries of Medicare and Medicaid, has reached a $2.85 million settlement with the government to resolve allegations that it defrauded various federal health care programs. According to a False Claims Act lawsuit filed by a whistleblower, the hospital billed Medicaid, Medicare, and the Federal Employees Health Benefits Program for detoxification treatments for ineligible patients.   

The anonymous whistleblower has been awarded $500,000 for his key role in the recovery of millions of taxpayer dollars. Under the False Claims Act, individuals with information about fraud can file a complaint while protected by anti-retaliation provisions, receiving between 15 and 30 percent of any resulting recoveries. 

According to the complaint that originated the settlement, Eagleville Hospital systematically admitted various categories of patients to secure the highest reimbursement class of detoxification treatments, when there was no medical necessity for it. As a consequence, the hospital submitted false claims to the government in its billing for these services. The alleged misconduct took place between January 2011 and December 2018....


Inpatient Rehabilitation Facility Network Encompass Pays $48 Million to Resolve Medicare Fraud Allegations

Alabama-based Encompass Health Corporation (now HealthSouth Corp.) has agreed to pay $48 million to settle Medicare fraud allegations. According to prosecutors, Encompass’s Inpatient Rehabilitation Facilities (IRFs) falsified "disuse myopathy" diagnostics in order to maintain their standing as high-reimbursement Medicare-approved IRFs.  

The alleged fraud was brought forward in three separate whistleblower lawsuits, later joined by the Department of Justice. According to the allegations, Encompass IRFs systematically admitted patients who were “too sick or disabled to participate in or benefit from intensive inpatient therapy." 

According to U.S. Attorney Maria Chapa Lopez (Florida, Middle District), "This important civil settlement concludes a lengthy, comprehensive investigation that brought to light a nationwide scheme that the government contends was intended to defraud our fragile public health...


SEC Whistleblower from Brazil Gets $4.5 Million Award After Reporting Misconduct by Zimmer Biomet

SEC Whistleblower from Brazil Gets $4.5 Million Award After Reporting Misconduct by Zimmer Biomet

A whistleblower in Brazil has just received a $4.5 million award for his role in uncovering a kickback scheme allegedly run by a subsidiary of Zimmer Biomet Holdings Inc. (Zimmer Biomet), a medical device manufacturer. The tipster is a former orthopedic surgeon who became aware of the alleged misconduct while practicing medicine in his home country.

Based in Indiana, Biomet markets its orthopedic and dental implant devices on a global scale. The whistleblower, on the other hand, is a prominent surgeon in South America and former president of Brazil’s Orthopedic Sports Medicine Society. As it is customary with SEC whistleblowers, his name has not been made public.

In 2013, the whistleblower reported the alleged misconduct anonymously to Biomet executives. Within 120 days, he reported it to the SEC. According to his reports, the company was still running a kickback scheme in Brazil, in spite of having faced SEC penalties in the past for the same type of misconduct....


Game Over for Monsanto: $2 Billion Verdict to Give Way to Massive Wave of Settlements, Top Roundup Litigator Says

Game Over for Monsanto: $2 Billion Verdict to Give Way to Massive Wave of Settlements, Top Roundup Litigator Says

The recent $2 billion jury verdict against Monsanto may be a clear indication that Bayer will likely settle the remaining 13,000 cases claiming the active ingredient in Roundup, glyphosate, causes aggressive blood and bone cancer.

Attorney Brian Mahany is convinced that numerous settlements will follow and has good evidence to back up his claim. An active participant in the recent spate of Roundup cancer lawsuits, he is well placed to interpret the verdict.

Global Monsanto/Bayer Settlement in The Works

According to Mahany, the court quietly postponed the bellwether trial scheduled to begin on May 20th. Instead, the court noted an upcoming “confidential mediation.”...


DOJ Joins Whistleblower Suit Against Mallinckrodt Over Fraudulent Billings Involving Pediatric Drug that Cost Medicare Billions

The Department of Justice has just joined two pharmaceutical company insiders in a lawsuit against Questcor Pharmaceuticals, which allegedly defrauded taxpayers out of hundreds of millions of dollars through a “multi-tiered” scheme to inflate the price of a pediatric drug.

The alleged scheme, which has been described as one of “the largest drug price increases” in our nation’s history, included bribing doctors and other healthcare professionals to boost sales.   

The defendant, Questcor Pharmaceuticals, is now Mallinckrodt. The drug in question is H.P. Acthar Gel. From 2000 to 2019, the price of the drug, which is used to treat a rare disorder in infants, went from $40 to $39,000 per unit, which represents nearly a 100,000 percent...


Did Illegal Kickbacks Help Mallinckrodt Sell Acthar for Lofty $39,000?

Did Illegal Kickbacks Help Mallinckrodt Sell Acthar for Lofty $39,000?

In the face of skyrocketing drug prices, the federal government has opted to intervene in a whistleblower lawsuit against Mallinckrodt Pharmaceuticals - whose drug price increases are among the largest in U.S. history.

For years, healthcare providers have criticized the price of Mallinckrodt’s H.P. Acthar Gel (Acthar), a drug used to treat symptoms of multiple sclerosis, lupus, rheumatoid arthritis, and seizures in infants. In August 2007, the price of Acthar jumped from $1,600 to $23,000 per vial.

Cost per vial of the drug has increased from $40 to nearly $39,000 in just 19 years - nearly a 97,000% price increase. Currently, annual Acthar sales exceed $1 billion.

But how does a drug company compete in the pharmaceutical world with prices at $39,000 per vial? According to two Mallinckrodt whistleblowers, by breaking the law....


Health Management Associates CEO Has Agreed to Pay $3.46 Million to Settle Alleged Kickbacks and Fraudulent Billings

Health Management Associates CEO Has Agreed to Pay $3.46 Million to Settle Alleged Kickbacks and Fraudulent Billings

Gary D. Newsome, the former CEO of Florida-headquartered hospital chain Health Management Associates LLC, has agreed to pay $3.46 million to resolve allegations about his role in a large-scale fraud scheme that cost Medicare millions of dollars.    

According to the whistleblower lawsuit resolved by the settlement, Newsome conspired to increase the number of admissions of Medicare beneficiaries into Health Management-controlled hospitals. The physicians also received illegal bonuses in exchange for admissions.

The hospital admissions mentioned in the lawsuit were medically unnecessary, as the patients did not require a hospital stay to be efficiently treated. The scheme was allegedly designed to increase Medicare billings....


US WorldMeds LLC Will Pay $17.5 Million to Resolve Medicare Fraud Allegations Involving Kickbacks

US WorldMeds LLC Will Pay $17.5 Million to Resolve Medicare Fraud Allegations Involving Kickbacks

Kentucky-based US WorldMeds LLC will pay $17.5 million to resolve allegations that it offered kickbacks to both doctors and patients to secure prescriptions of its drugs Apokyn and Myobloc, used to treat Parkinson’s disease. The prescriptions generated millions of dollars for the company in the shape of Medicare billings.

The multi-million-dollar settlement resolves a whistleblower lawsuit filed by two former employees of US WorldMeds, Dr. Bennett and Dr. Chinnapongse. Under the False Claims Act, the two relators stand to receive a shared award amounting to 15-25 percent of the total recoveries.

The whistleblowers quit their jobs immediately after the resolution of the lawsuit became public. According to a spokesperson for Dr. Chinnapongse, he is not only “a brilliant scientist,” but also “a deeply ethical doctor who stood up at great risk to do the right thing,” and, “precisely the kind of whistleblower that the False Claims Act is meant to reach.”...