Healthcare and Pharma Cases


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.”...


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.”...