Healthcare and Pharma Cases


Astellas Will Pay $100 Million to Resolve Kickback Allegations Involving Medicare Copays

Astellas Will Pay $100 Million to Resolve Kickback Allegations Involving Medicare Copays

Astellas, a pharmaceutical company, has just agreed to pay $100 million to resolve allegations that it illegally used charitable foundations to cover Medicare copays to boost sales of its drug Xtandi.

Because patients covered by Medicare are often required to make partial payments for prescription drugs, many foundations subsidize them. When pharmaceutical companies donate to those foundations, the practice may violate the Anti-Kickback Statute, which forbids drugmakers from incentivizing the purchase of their products.

Astellas is the maker of Xtandi, a drug used to treat prostate cancer. According to the government’s findings, Astellas directly asked two foundations to start two funds to assist prostate cancer patients with their copay obligations. The funds then began exclusively subsidizing the purchase of Xtandi by Medicare-covered patients. Meanwhile, Astellas was the only donor to the funds....


Sutter Health Will Pay $30 Million Over Medicare Advantage Overpayment, Government Intervenes in Related Whistleblower Lawsuit

Sutter Health Will Pay $30 Million Over Medicare Advantage Overpayment, Government Intervenes in Related Whistleblower Lawsuit

Sutter Health LLC, a nonprofit healthcare provider based in Northern California, and its affiliates, Sutter East Bay Medical Foundation, Sutter Pacific Medical Foundation, Sutter Gould Medical Foundation, and Sutter Medical Foundation, have agreed to pay $30 million to resolve allegations that they overcharged the Medicare Advantage program.

Individuals covered by Medicare can choose to enroll in the Medicare Advantage plan. The government healthcare program then pays so-called Medicare Advantage organizations (“MAOs”) a per-person amount to provide services to those Medicare beneficiaries. As the number of seniors who are opting into the Medicare Advantage plans increases, opportunities for this type of fraud also increase. Medicare Advantage offers additional benefits like dental care, eyeglasses, and fitness expense reimbursements.   

Patients with serious diagnoses have a higher “risk score,” which determines the amount of Medicare Advantage’s per-person payments. According to the allegations resolved by the recent settlement, Sutter Health and its affiliates listed unsupported diagnoses for Medicare Advantage enrollees in order to increase billings....


West Virginia’s Wheeling Hospital Accused of Paying Illegal Kickbacks to Doctors in Exchange for Lucrative Patient Referrals

West Virginia’s Wheeling Hospital Accused of Paying Illegal Kickbacks to Doctors in Exchange for Lucrative Patient Referrals

A former Wheeling Hospital VP has filed a whistleblower lawsuit alleging his employer routinely paid kickbacks to physicians in exchange for patient referrals.

Whistleblower Louis Longo claims the hospital was struggling financially until it started paying kickbacks to physicians in exchange for patient referrals. The complaint mentions two specialists who received substantial financial incentives from Wheeling in violation of both the Stark Law and the Anti-Kickback Statute.

Because the kickbacks Wheeling paid resulted in Medicare and Medicaid beneficiary referrals, the hospital submitted false claims for payment to the government programs. This allowed Longo to file a suit under the False Claims Act. If the complaint is successful, he could receive a multi-million-dollar reward....


MedStar Health to Pay $35 Million Over Kickback Allegations, Three Whistleblowers to Receive 7-Figure Awards

MedStar Health to Pay $35 Million Over Kickback Allegations, Three Whistleblowers to Receive 7-Figure Awards

Maryland-based MedStar Health and two of its affiliates have agreed to pay $35 million to the government to resolve allegations that they engaged in conduct that violated the Anti-Kickback Act.

The settlement resolves a lawsuit brought by three whistleblowers under the False Claims Act. MedStar’s two co-defendants are MedStar Union Memorial Hospital, and MedStar Franklin Square Medical Center, both based in Baltimore.

According to the complaint, MedStar Health paid kickbacks to Maryland-based MACVA, a cardiology group, in exchange for referrals of Medicare-covered patients in need of lucrative cardiac surgery. The kickbacks were allegedly disguised as contracts for services to be provided at the Union Memorial and Franklin Square hospitals. Eventually, the alleged scheme led MedStar to submit false claims for payment to Medicare....


60-Days Under Seal Shields FCA Cases, Deters Retaliation

60-Days Under Seal Shields FCA Cases, Deters Retaliation

Jon Mohatt’s whistleblower case – the one that resulted in Montana’s largest False Claims Act recovery ever - was kept a secret from defendant Kalispell Regional Healthcare System for five months. On September 25, 2018, the government opted to intervene in Mohatt’s case and unsealed the case.

As part of his qui tam claim, the former Chief Financial Officer for Kalispell Regional alleged that the hospital system violated the federal Stark Law and Anti-Kickback Statute by paying physicians to refer patients.

In all, Mohatt’s whistleblower claims resulted in a $24 million settlement. Mohatt collected a $5.4 million cash whistleblower award for his efforts in pursuing the claim....


Whistleblower Awards in Walgreens Medicaid Fraud Case to Surpass $22 Million

Whistleblower Awards in Walgreens Medicaid Fraud Case to Surpass $22 Million

Retail pharmacy giant Walgreen Co. will pay $60 million to settle claims that it overcharged Medicaid for prescription drugs. The alleged scheme was brought forward in a whistleblower lawsuit filed in 2012. This is the second settlement in that case, which involves alleged fraud against 39 states and the federal government.

The whistleblower, Marc Baker, was once a Walgreens pharmacy manager in Florida. Due to the nature of his work for the company, Baker was in a position to witness how the pharmacy chain knowingly offered illegal kickbacks to lure Medicaid-covered patients and overcharged government programs for prescription drugs. In January 2017, there was a first settlement relating to some of Baker´s allegations. As a result of that agreement, he received a $9.7 million whistleblower award. Now, following the new resolution, he stands to get an additional $12.6 million.  

Upon the announcement of the settlement, a spokesperson for Baker commented, “This unprecedented case exemplifies the importance of whistleblowers in the public-private partnership to prevent government fraud. It illustrates the power of one individual to expose and stop fraud against the government – and, ultimately, U.S. taxpayers who foot the bill.”...


Abbott and AbbVie Will Pay $25 Million Over Alleged TriCor Kickbacks, Attorney John Uustal Secures $6.5 Million for Whistleblower

Abbott and AbbVie Will Pay $25 Million Over Alleged TriCor Kickbacks, Attorney John Uustal Secures $6.5 Million for Whistleblower

The U.S. Attorney for the Eastern District of Pennsylvania has just announced a $25 million settlement to resolve allegations that Abbott Laboratories and its spinoff AbbVie Inc. unlawfully marketed its drug TriCor to physicians, offering kickbacks and promoting off-label uses. The alleged misconduct resulted in fraudulent claims being submitted to Medicaid and Medicare, amounting to millions of dollars.  

TriCor has been approved by the FDA to treat certain types of cholesterol imbalance. Misconduct involving marketing of the drug was first brought to light in a whistleblower lawsuit filed by the Kelley/Uustal law firm in 2012. The insider information that eventually led attorney John Uustal’s team to secure a settlement, was provided by Amy Bergman, who used to be a sales rep. at Abbott.  

The False Claims Act allows whistleblowers to file a qui tam action on behalf of defrauded U.S. taxpayers. When the information they provide is original and useful for holding fraudster’s accountable, the tipsters receive a reward between 15 and 30 percent of the total recoveries...


Amerisource Pays $625 Million to Resolve Pharmaceutical Fraud Claims

Amerisource Pays $625 Million to Resolve Pharmaceutical Fraud Claims

Three whistleblower suits have unveiled a large scam involving unlawful repackaging and reselling of drugs by AmerisourceBergen Corporation. The lawsuits were filed by Michael Mullen, former Amerisource employee, Omni Healthcare Inc., an oncology practice, and pharmacy workers Daniel Sypula and Kelly Hodge. To resolve civil liability, the company settled for $625 million.

According to The Department of Justice, the wholesale medical company had been contaminating drugs, bribing, illegally labeling drugs, and creating sham patients for at least thirteen years, via a company named Medical Initiatives Inc., which shut down in 2014. This is not the first time Amerisource has been taken to court or forced to pay in relation to criminal activity. In 2017, it paid $260 million in a misbranded drugs case.

According to allegations, Medical Initiatives took part in a massive fraudulent scheme between 2001 and 2014. They purchased bottles of several drugs and transferred the drugs into prefilled syringes. Some of the drugs involved were Procrit, Aloxi, Kytril, Anzemet, and Neupogen. All these are used by cancer patients undergoing chemotherapy treatment. By selling those prefilled syringes, the company unlawfully produced more doses than it purchased, profiting to the tune of around $100 million. ...


REPORT: Hospice Schemes & Fails Hurt Taxpayers and Medicare Beneficiaries

REPORT: Hospice Schemes & Fails Hurt Taxpayers and Medicare Beneficiaries

A new report by the Office of the Inspector General outlines the widespread utilization of hospice services covered under Medicare, while also highlighting the sytem’s flaws and some central vulnerabilities.

Because of the solace it can provide for people in the later stages of life, and their families, many Medicare beneficiaries opt for hospice care. In 2016 alone, Medicare paid $16.7 billion for hospice services utilized by 1.4 million individuals participating in the program.

Unfortunately, Medicare’ steep bills for hospice care do not always translate into quality care for its beneficiaries. The OIG found that hospices often left beneficiaries in pain, failed to provide medication, and responded poorly to a variety of health complications.

According to the report, Medicare beneficiaries are often left in the dark about crucial decisions impacting their care. In addition, hospices were found to routinely bill for the most expensive level of care without medical necessity....


8 Physicians Identified in Beaumont Hospital $84.5M Illegal Kickback FCA Settlement

8 Physicians Identified in Beaumont Hospital $84.5M Illegal Kickback FCA Settlement

Detroit’s William Beaumont Hospital system has agreed to pay $84.5 million to resolve allegations that eight physicians accepted illegal kickbacks for patient referrals in violation of the False Claims Act (“FCA”), the Department of Justice announced Thursday.

Whistleblower Dr. David Felten is set to receive a soon-to-be-determined cash whistleblower award for filing the initial qui tam lawsuit that led to the government’s recovery.

Felten Claims Beaumont Trades Cash and Office Rent for Patient Referrals

After joining Beaumont in 2005 as Vice President of Research, the globally recognized neuroscientist Dr. David Felten, (then 57) noticed several arrangements between Beaumont and its physicians that appeared to violate of the Anti-Kickback Statute and Stark Law....