By: Don McKenna

A recent opinion from the Sixth Circuit Court of Appeals highlights the pitfalls of hiring a lawyer who does not have specific experience handling False Claims Act cases.  The False Claims Act has numerous procedural requirements not found in most types of litigation.  For example, only the first whistle blower to file suit on a particular claim may bring the suit.  All others who file later on the same claims are barred.  Thus, the False Claims Act is a "race to the courthouse."

Further, the False Claims Act requires that the lawsuit be filed under seal so that neither the defendant, nor anyone in the public, know about the suit.  The seal requirement was intended by Congress to give the Government sufficient time to investigate the allegations and decide whether or not to intervene in the suit.  One whistle blower recently found out the hard way, the perils of hiring a lawyer not familiar with this particular procedural requirement.

In, U.S. ex rel. Summers v. LHC Group Inc., 2010 WL 3917058 (6th Cir. Oct. 4, 2010), the whistle blower filed a False Claims Act suit alleging the defendant fraudulently billed Medicare for unnecessary health services.  However, the whistle blower failed to meet the procedural requirement of filing the suit under seal.  The defendant moved to dismiss based on failure to meet the seal requirement and the trial court ordered the case dismissed.  On appeal, the Sixth Circuit Court of Appeals held that failing to file the case under seal was fatal to the case and was not simply a procedural mis-step that could be over looked.

Moral of the story for whistle blowers: Research your lawyer and make sure he or she has experience handling False Claims Act cases.  Read the lawyer's professional bio.  See if the lawyer has published any articles on False Claims Act topics.  Has the lawyer spoken at any seminars about the False Claims Act?  Does the lawyer appear in as counsel of record in any False Claims Act published federal opinions?  These are ways that you can be sure your lawyer knows the area of the law and will avoid the procedural pitfalls of the False Claims Act.

If you wish to speak to a False Claims Act lawyer at Hare, Wynn, Newell & Newton call 800-568-5330.

By: Don McKenna

The Health and Human Services Office of Inspector General recently released its 2011 Work Plan. The 159 page document details the focal areas of the HHS-OIG during the 2011 fiscal year.  One of the primary objectives of HHS-OIG is to prevent fraud, waste and abuse in the Medicare system.  The work plan describes the areas in which the OIG will focus its review and investigation.  Necessarily, HHS-OIG resources will be invested in these areas - making related False Claims Act cases likely to get more attention and resources.

Over the next few days and weeks, we will review that entire report and describe areas of HHS-OIG concentration that may be fertile ground for whistleblowers, with inside knowledge and information, to step forward.  Below is the first installment of that review.

Payments for Non-physician Outpatient Services:

Payments for non-physician outpatient diagnostic and admission related diagnostic services rendered within 3 days prior to a hospital admission.  Separate payments for these services are prohibited and OIG has found this to be an area of abuse.

Duplicate Payments for Medical Education Expenses:

The OIG is looking to see if duplicate payments are being made to hospitals for direct graduate medical education and indirect graduate medical education costs.  OIG will be focusing on whether duplicate claims for payment have been made by hospitals.

Claims for Hospital Acquired Conditions

OIG will be reviewing payments claimed for hospital acquired conditions such as staph infection.  A hospital acquired condition is a preventable medical condition the patient did not have upon admission, but acquired in the hospital.  Medicare implemented the hospital acquired condition policy on October 1, 2008.  The policy prevents additional payment under Medicare's hospital IPPS for certain conditions or complications that are determined to be reasonably preventable.

These areas of HHS-OIG concentration are ripe for whistleblowers to step forward.  Stay tuned as we provide further details of the work plan in the days and weeks ahead.

Hare, Wynn is proud to represent whistleblowers who bring to light the fraud pharmaceutical companies perpetrate on federal tax payers by ripping off Medicare, Medicaid, Tricare and Champus.  The latest settlement of $422 million against Novartis for off-label marketing and paying kickbacks is one suit in a series of False Claims Act lawsuits against big pharmaceutical companies.  These suits, brought by courageous whistleblowers and their counsel have recovered billions of dollars for the United States tax payers.  We are proud of our client for stepping forward and are glad that he will reap a reward for his efforts.

The question remaining is whether big Pharma will cease the fraudulent practices, or simply factor these suits as a cost of doing business.  The fact that suits continue seems to suggest the latter.  Hopefully, more whistleblowers and consistent Government prosecution, will stem the tide of fraud by big Pharma on the American tax payer.

By: Don McKenna

The American Recovery and Reinvestment Act of 2009 provided hundreds of millions of American tax payer dollars to stimulate the economy through spending on construction and infrastructure improvement projects.  When the Government lays out that kind of money, fraud, by those wanting to get more than their fair share, is sure to follow.   Simply look to Boston's "Big Dig" as an example.  Over $500 million in fraud on that project has been recovered to date.

Fortunately, President Abraham Lincoln drafted the most effective piece of legislation to combat fraud on the public fisc.  The False Claims Act a/k/a "Lincoln's Law" empowers private citizens with knowledge of fraud on Government to come forward, file suit against the entity defrauding the Government, and receive a reward if the Government makes a successful recovery.

There are numerous ways in which construction contractors rip off the American tax payer.  The following lists some of the common types of fraud:

-Padding hours spent on the project;

-Failing to pay the prevailing wage as required by the Davis-Bacon Act;

-Hiring illegal immigrants and undocumented workers on Government funded projects in violation the Immigration Reform and Control Act;

-Falsely inflating the wages the contractor claims to pay workers without actually paying those wages;

-False certifications of payroll submissions;

-Padding materials cost;

-Failing to conduct testing called for by the contract and certifying that the testing was done;

-Falsifying test results (for example concrete test results);

-Misrepresenting actual materials costs;

-Bid rigging;

-Falsely certifying that the contractor is a disadvantage business enterprise or minority owned business; and,

-Paying kickbacks under the contract.

Both prime and subcontractors can be held liable for submitting false claims for payment as long as the money ultimately flows from the Government.

The American tax payers have paid enough in bailout and stimulus funding.  We should not be ripped off by the recipients of those funds which were meant to benefit our infrastructure, provide work for jobless Americans and stimulate our economy.  If you are aware of fraud by contractors working on Government projects, get a lawyer who understands the False Claims Act and report the fraud.

If you wish to speak to a False Claims Act lawyer at Hare, Wynn, Newell & Newton, simply call 800-568-5330.

Over the past two years, the Department of Justice has collected over $2 billion from big pharmaceutical companies in fines, damages and civil penalties for defrauding Medicare and other health care programs funded with tax payer dollars.  Most of these cases were brought by corporate whistleblowers - insiders who came forward with information and allegations of kickbacks and off-label marketing schemes designed to increase sales and bilk the Medicare system out of hundreds of millions of dollars.  But are these settlements having any deterrent effect?  Or have the pharmecutical companies decided that the reward of big profits and higher stock prices is simply greater than the risk and dollars extracted by the Government when the company gets caught with its hand in the U.S. Treasury cookie jar?

Anectdotal evidence suggests that the pharmaceutical companies are simply willing to run the risk of getting caught and pay up if and when they do get turned in.  In the first five months of 2010, the United States Department of Justic has announced more than $1.134 billion of civil and criminal settlements with pharmaceutical companies including: Novartis; Alpha-pharma; Astrazeneca; Schwartz Pharma; and Ortho-McNeil.  The Department has also joined a whistleblower off-label marketing suit against Johnson & Johnson.  This latest wave of suits and settlements comes more than seven years after such suits became prominent news and eight years after the 2002 self-imposed Pharma Code of Interaction with Health Care Professionals (revised in 2008).  As a lawyer who represents whistleblowers in these types of cases, I am certain that there are more big settlements to follow.  Thus, it appears big Pharma has decided to continue with business as usual and pay the settlements along the way.  After all, if an off-label marketing scheme brings in profits of $3 billion and the company can settle the False Claims Act whistleblower case with the Department of Justice for $1 billion, the company is $2 billion in the black and the U.S. taxpayer is $2 billion in the red.

Do we need a change in the law to address this?  No.  The False Claims Act has an existing mechanism, often referred to as "the hammer," if the Department of Justice chooses to use it.  Under the False Claims Act, a defendant can be penalized up to $10,000 for each false claim for payment.  If the Department of Justice were to use this tool, it could extract a $10,000 penalty for each prescription originating as a result of an off-label marketing scheme.  Such severe penalties would prevent the pharmaceutical companies from reaping profits generated by their illegal schemes.  If a self-imposed code and billions of dollars in settlements won't make big Pharma change its ways, perhaps it is time for the Department of Justice to yield the hammer provided to it by the False Claims Act.