Healthcare and Pharma Cases


Visiting Nurse Service of New York Faces Medicaid and Medicare Fraud Lawsuit

Visiting Nurse Service of New York Faces Medicaid and Medicare Fraud Lawsuit

A whistleblower lawsuit has accused the Visiting Nurse Service of New York (VNSNY) of defrauding Medicaid and Medicare and receiving millions of dollars for care ordered by doctors, which the patients never received. According to the allegations, VNSNY systematically billed for the full number of nursing and rehabilitation visits ordered by doctors, but patients received only a fraction of them.

The lawsuit was initiated by whistleblower Edward Lacey, VNSNY's former VP of Operations Improvement and Integration, who had been with the organization for 16 years. Investigations into fraudulent conduct are, however, nothing new for the healthcare provider Visiting Nurse Service of New York. In 2014, VNSNY paid the government $35 million to settle a lawsuit alleging that it had enrolled over 1,700 ineligible individuals into Medicaid plans. 

Under the False Claims Act, whistleblowers such as Edward Lacey who have information about fraud against the government can file a lawsuit on the government's behalf and are entitled to a portion of any received damages and civil penalties. Whistleblower rewards range from 15 to 30% of the total recovery....


Vibra Healthcare Info Coder Wins $4M+ Whistleblower Award in FCA Lawsuit

Vibra Healthcare Info Coder Wins $4M+ Whistleblower Award in FCA Lawsuit

Sylvia Daniel, a former health information coder at Vibra Hospital of Southeastern Michigan, will receive a whistleblower award of at least $4 million after filing a qui tam lawsuit alleging the hospital billed Medicare for medically unnecessary services, the Department of Justice announced Wednesday. Vibra Healthcare LLC, a Mechanicsburg, Pennsylvania-based national hospital chain, has agreed to pay $32.7 million plus interest to resolve claims its facilities violated the False Claims Act.

“Medicare beneficiaries are entitled to receive care that is determined by their clinical needs and not the financial interests of healthcare providers,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division, commenting on the settlement of Sylvia Daniel’s whistleblower lawsuit against Vibra Healthcare. 

“All providers of taxpayer-funded federal healthcare services, whether contractors or direct billers, will be held accountable when their actions cause false claims for medically unnecessary services to be submitted.”...


Feds Sue Vanguard Healthcare Nursing Homes: "Grossly Substandard" Care

Feds Sue Vanguard Healthcare Nursing Homes: "Grossly Substandard" Care

The United States filed a False Claims Act lawsuit against Brentwood, Tennessee-based Vanguard Healthcare LLC., alleging the company submitted false claims to Medicare and TennCare, provided either non-existent or “grossly substandard” care for elderly patients in six of its Tennessee nursing homes, and forged signatures on required nursing facility Pre-Admission forms, the Department of Justice announced today.

Nursing Home Residents Suffer Non-Existent, Substandard Care

According to the False Claims Act lawsuit, between January 2010 and December 2015, six Vanguard Healthcare nursing homes exhibited ongoing staffing and medical supply shortages, failed to practice standard infection control procedures, failed to deliver prescribed medications, failed to follow physicians’ orders in caring for wounds, failed to practice proper pain management, gave “unnecessary and excessive” psychotropic medications to residents and used unnecessary physical restraints....


Kindred Healthcare Hit with Historic CIA Penalty

Kindred Healthcare Hit with Historic CIA Penalty

Louisville-based post-acute care provider, Kindred Health Care, Inc., has paid the largest penalty ever imposed by the Office of the Inspector General (OIG) for failing to comply with a corporate integrity agreement (CIA). The record penalty amounted to over $3 million, the Department of Health and Human Services’ (HHS) Inspector General Daniel R. Levinson announced today.

OIG Imposes CIA In Exchange for Exclusion from Medicare Program

Kindred Health Care provides hospice services for Medicare patients with life expectancies of six months or less. Patients receiving hospice care agree to cease curative care and only receive palliative care to lessen their symptoms....


Feds Recover $30mm: Claim Skilled Nursing Facilities Billed for Unnecessary Rehab Therapy

California’s Orange County-based North American Health Care Inc. (NAHC) has agreed to pay the U.S. government $28.5 million to resolve long-running allegations it billed Medicare and TRICARE for medically unnecessary rehabilitation therapy services in violation of federal and state False Claims Acts. NAHC’s senior vice president of reimbursement analysis and chairman of the board will pay an additional $1.5 million, the Department of Justice announced today.

California North American Health Care Alleged False Claims Act Violations

False Claims Act and other charges claim NAHC’s inpatient skilled nursing facilities subjected its residents to unnecessary occupational, physical and speech therapy sessions while the government footed the bill. The private, for-profit company operates 35 facilities across California, billing Medicare and California Medicaid (Medi-Cal) for eligible services. For services to be eligible for payment, however, they must be “reasonable and necessary for the diagnosis or treatment of illness or injury.”...


Thalidomide, Really? Again?! Whistleblower Documents Unsealed - Celgene Corp in Hotseat

Hundreds of recently unsealed documents may supply priceless evidence to bolster California whistleblower Beverly Brown’s claims alleging Celgene Corporation marketed thalidomide for off-label cancer treatments, Bloomberg announced Monday.

Yes, thalidomide, the once popular morning sickness pill used to treat pregnant women in the 50s and 60s. The same thalidomide that caused over 10,000 infants to be born with severe limb malformation, organ deformities and blindness. Only 50% of the children survived.

Morning Sickness Drug Thalidomide Banned For Causing Birth Defects

Officials promptly banned prescription of thalidomide as an anti-nausea medication for pregnant women, but in 1998, Celgene gained U.S. Food and Drug Administration (FDA) approval to use thalidomide, brand name Thalomid, to treat complications associated with leprosy. With around 200,000 cases of leprosy worldwide, Celgene wasn’t going to get rich off Thalomid sales, but more than 1.68 million Americans are diagnosed with cancer every year....


Whistleblower’s Lawsuit Tags Evercare’s Optum Palliative for $18M on Healthcare Fraud Allegations

Whistleblower’s Lawsuit Tags Evercare’s Optum Palliative for $18M on Healthcare Fraud Allegations

In 2014, the federal government decided to intervene against Evercare, now known as Optum Palliative and Hospice Care, in two whistleblower lawsuits which alleged that the hospice care provider had claimed Medicare reimbursements for patients who were not eligible for the type of care they received.

Two years later, a settlement has been reached, by which Optum Palliative will pay the federal government $18 million to resolve the False Claims Act allegations, which were initiated by two former Evercare employees, whistleblowers Terry Lee Fowler and Lyssa Towl. The whistleblowers will receive a reward that could go as high as 30% of the multi-million dollar recovery.

Lyssa Towl and Terry Lee Fowler Whistleblower Suit Alleged Medicare Fraud

Hospice care is covered under Medicare for patients who are terminally ill, but Evercare billed the federal program for the care of elderly patients who, albeit often incurable, did not fulfill the requirements for Medicare's hospice benefits. In order to be eligible, a patient must have a life expectancy of six months or less....


Lexington Medical Settles Stark Law Whistleblower Hammett’s Allegations for $17M

Lexington Medical Settles Stark Law Whistleblower Hammett’s Allegations for $17M

South Carolina-based Lexington Medical Center has agreed to pay $17 million to resolve allegations of participating in illegal financial arrangements with Lexington physicians, the U.S. Justice Department announced Thursday. Former Lexington physician, Dr. David Hammett filed the initial whistleblower lawsuit that led the government to investigate. Dr. Hammett will collect nearly $4.5 million for reporting the alleged False Claims Act (FCA) and Stark Law violations.

Lexington Physician Agreements Violate Stark Law per Dr. David Hammett’s Suit

The Stark Law helps ensure that physicians base their patient referrals on medical need and not on financial gain. Lexington Medical Center allegedly violated the Stark Law when they entered financial agreements with 28 physicians that met three violation criteria: the agreements (1) consider the quantity and/or quality of physician referrals, (2) compensate the physicians in excess of fair market value, or (3) are not commercially reasonable....


Johnson & Johnson Settles $18M Acclarent Off-Label Marketing Whistleblower Lawsuit

Johnson & Johnson Settles $18M Acclarent Off-Label Marketing Whistleblower Lawsuit

Irvine-headquartered Johnson & Johnson subsidiary, Acclarent Inc., has agreed to pay $18 million in a settlement over false claims healthcare fraud allegations, the US Justice Department announced Friday. Whistleblower Melayna Lokosky filed the initial qui tam lawsuit that led to government investigation. Lokosky will receive a $3.5 million cash whistleblower award for her efforts in exposing the fraud.

Sinus Spacer Marketed For Off-Label Drug Delivery Use

Johnson & Johnson acquired the California medical device manufacturer, Acclarent, in 2010. The company specializes in the development of minimally invasive ear, nose and throat (ENT) technologies. Allegations in this case surrounded the marketing and distribution of a sinus spacer known as the Relieva Stratus MicroFlow Spacer....


Tuomey Healthcare or Nexsen Pruet - Who’s Really Guilty in $72M Kickback Settlement

Tuomey Healthcare or Nexsen Pruet - Who’s Really Guilty in $72M Kickback Settlement

Healthcare fraud is becoming more problematic and intricate every day. One might tend to believe that once a case is settled, that is basically the end of the matter; the bad guys have been made somehow accountable, the government recovers moneys lost, the whistleblower becomes the hero and gets a reward.

Unfortunately, healthcare providers given to fraudulent behavior seem to have found a way to try to get back some of the money they should never have received from Medicare/Medicaid in the first place. Namely, some of them have begun to sue their legal counsel, alleging that they “didn’t know” they were breaking the law. A recent case involving Tuomey Healthcare System, a North Carolina-based hospital, has put this particular legal strategy at the forefront of whistleblower news.

Michael Drakeford, Tuomey Healthcare Whistleblower, Alleged Kickbacks

In October 2015, Tuomey had reached a $72.4 million settlement with the government in a False Claims Act lawsuit initiated by whistleblower Michael Drakeford. The case, which spanned over 10 years and included various appeals, was based on allegations that Tuomey had violated the Stark law by entering into certain employment arrangements with physicians in exchange for referrals. The DOJ eventually agreed, and Tuomey was forced to settle, as it was faced with the risk of losing over $200 million in a potential trial....