Acting United States Attorney Alexander C. Van Hook announced that Shreveport Prosthetics, Inc. (“SPI”) has agreed to pay $1.6 million, plus interest, to the federal government to resolve allegations that it violated the False Claims Act for false supplier billings to the Medicare program.

SPI is a Louisiana corporation that provides upper and lower extremity prosthetics to patients in North Louisiana. The civil settlement resolves allegations that when SPI's supplier number was deactivated, SPI funneled its claims to Medicare through a supplier in Texas for services that were rendered by SPI in Louisiana. SPI also routinely waived patient coinsurance amounts over a three year period, resulting in Medicare being overcharged for the billed services.

This lawsuit was initiated by former office administrator/billing specialist Kimberly Throgmorton under the qui tam, or whistleblower provisions, of the False Claims Act.  Under the False Claims Act, private citizens can bring suit on behalf of the United States and share in any recovery.  Ms. Throgmorton will receive over a quarter of a million as her share of the government's recovery.

Konica Minolta Healthcare Americas Inc., based in Wayne, New Jersey, has agreed to pay $500,000 to resolve False Claims Act allegations that its former subsidiary, Viztek LLC, caused users to submit false claims by misrepresenting the capabilities of its electronic health records (EHR) software. 

According to documents filed in this case and the contentions of the United States contained in the settlement agreement:

The American Recovery and Reinvestment Act of 2009 established the Medicare & Medicaid EHR Incentive Program to encourage hospitals and eligible professionals – health care providers – to adopt and demonstrate their meaningful use of EHR technology. The U.S. Department of Health and Human Services (HHS) made incentive payments available to eligible professionals and hospitals that adopted certified EHR technology and met certain requirements relating to their use of the technology. To obtain certification for their product, companies that developed and marketed EHR technology were required to, among other things, demonstrate that their products satisfied certain HHS-adopted criteria.

The United States contends that Viztek fraudulently obtained certification for its product, known as “EXA EHR,” when it misrepresented to its certifying entity that the product complied with all applicable requirements for certification. Viztek knowingly caused eligible providers who used EXA EHR to falsely attest to compliance with the HHS requirements, which caused false claims for incentive payments to be submitted to the Medicare Program.

The allegations were raised in a lawsuit filed under the qui tam, or whistleblower, provisions of the False Claims Act, which allows private citizens with knowledge of fraud to bring civil actions on behalf of the government and to share in any recovery.

The case is captioned United States ex rel. Leighsa Wilson v. Viztek Inc. et al. The claims settled by this settlement are allegations only, and there has been no determination of liability.

Massachusetts-based DUSA Pharmaceuticals, Inc. (DUSA), a subsidiary of Sun Pharmaceutical Industries, Inc. (Sun Pharma), has agreed to pay the United States $20.75 million to resolve allegations that DUSA caused physicians to submit false claims to Medicare and the Federal Employee Health Benefit Program by knowingly promoting an administration process for the drug Levulan Kerastick that contradicted the product instructions approved by the U.S. Food and Drug Administration (FDA) and was unsupported by sufficient clinical evidence.  

Levulan Kerastick is a prescription topical solution approved by the United States Food and Drug Administration (FDA) for the treatment of minimally to moderately thick actinic keratosis (AKs) of the face or scalp.  At all relevant times, the “Dosage and Administration” section of the drug's FDA-approved instructions described a two-stage process involving application of the topical solution to the target lesions and then, following an incubation period of 14 to 18 hours, illumination of the target lesion with blue light.  

The United States alleged that, by January 2014, senior management at both DUSA and Sun Pharma knew that administration of Levulan Kerastick employing short incubation periods ranging from one to three hours resulted in AK clearance rates significantly lower than those achieved in clinical trials using 14 to 18-hour incubation.  Nonetheless, between January 2014 and December 2016, DUSA allegedly encouraged physicians to use these demonstrably less effective short incubation periods by using, among other things, paid physician speaker programs, paid physician peer-to-peer discussions, promotion by DUSA's sales force, and the dissemination of incomplete or misleading responses to questions from prescribing doctors. 

The department further alleged that DUSA failed to inform physicians that administering the drug using short incubation periods resulted in significantly lower AK clearance rates than achieved with the longer incubation period described in the FDA-approved instructions, and, in some instances, the company falsely stated that AK clearance rates were the same for the shorter and less effective incubation periods. 

As part of the settlement, DUSA and its parent company, Sun Pharma, have agreed to enter into a Corporate Integrity Agreement with HHS-OIG.  That agreement provides for procedures and reviews to be put in place to avoid and promptly detect conduct similar to that which gave rise to this matter.    

The settlement with DUSA resolves a lawsuit filed under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and share in a portion of the government's recovery.  The civil lawsuit was filed by Aaron Chung, who formerly worked for DUSA as a sales representative.  As part of today's resolution, Chung will receive approximately $3.5 million.

The lawsuit is captioned United States of America ex rel. Chung v. DUSA Pharmaceuticals, Inc., No. 16 cv 1614-JLR. 

Ghanshyam Bhambhani, a former Queens cardiologist, will pay a total of $2 million to settle civil claims that he paid kickbacks to other physicians for referrals of patients insured by Medicare, Medicaid and the Federal Employees' Health Benefits Program.  Under the terms of the settlement, Bhambhani will pay the United States $1,370,294.50.  In addition, he will pay the State of New York $629,705.50.  

An investigation by the Office, the FBI and OPM-OIG revealed that, from 2010 through 2017, Bhambhani paid other doctors compensation disguised as rent for patient referrals in violation of the Anti-Kickback Statute and the False Claims Act.  The investigation also revealed that Bhambhani falsified records to justify cardiac procedures. Bhambhani admitted engaging in this conduct and has agreed to cooperate with the Government.

The agreement resolves a lawsuit originally brought by a whistleblower under the qui tam, or whistleblower, provisions of the False Claims Act, captioned United States ex rel. FNU LNU LLC v. New York Cardiology P.C., et al., Civil No. 14-4581 (EDNY).  The False Claims Act permits private citizens with knowledge of fraud against the government to bring a lawsuit on behalf of the United States and to share in the recovery. 

In 2018, Bhambhani surrendered his medical license after pleading guilty in the Eastern District of New York to one count of conspiracy to pay healthcare kickbacks.  He was sentenced to 34 months in prison, three years' supervised release and ordered to pay $217,364.83 in criminal restitution and $1,080,000 in criminal forfeiture. 

Longwood Management Corporation and 27 affiliated skilled nursing facilities (Longwood) have agreed to resolve allegations that they violated the False Claims Act by submitting false claims to Medicare for rehabilitation therapy services that were not reasonable or necessary, the Department of Justice announced July 13.  Longwood is headquartered in California and the 27 skilled nursing facilities are also located in California.  

The settlement resolves allegations that Longwood submitted false claims for rehabilitation therapy by engaging in a systematic effort to increase Medicare billings.  Medicare reimburses skilled nursing facilities at a daily rate that reflects the skilled therapy and nursing needs of qualifying patients.  The greater the patient's needs, the higher the level of Medicare reimbursement.  The highest level of Medicare reimbursement for skilled nursing facilities is for “Ultra High” therapy patients, who require a minimum of 720 minutes of skilled therapy from two therapy disciplines (e.g., physical, occupational, or speech therapy), one of which has to be provided five days a week.

Longwood allegedly knowingly submitted or caused the submission of false and fraudulent claims to Medicare for medically unreasonable and unnecessary Ultra High levels of rehabilitation therapy for Medicare Part A residents.  Specifically, Longwood allegedly pressured therapists to increase the amount of therapy provided to patients to meet pre-planned targets for Medicare revenue.  These targets were alleged to have been set without regard to patients' individual therapy needs and could only be achieved by billing for a high percentage of patients at the Ultra High level.

The settlement covers conduct that occurred from May 1, 2008 through Aug. 1, 2012 at six facilities (Alameda Care Center, Burbank Rehabilitation Center, Magnolia Gardens Convalescent Hospital, Montrose Healthcare Center, Sherman Oaks Health & Rehab Center, and West Hills Health & Rehab Center); and from Jan. 1, 2006 through Oct. 10, 2014 at twenty-one facilities (Burlington Convalescent Hospital, Chino Valley Rehabilitation Center LLC, Colonial Care Center, Covina Rehabilitation Center, Crenshaw Nursing Home, Green Acres Lodge, Imperial Care Center, Imperial Crest Health Care Center, Laurel Convalescent Hospital, Live Oak Rehabilitation Center, Longwood Manor Convalescent Hospital, Monterey Care Center, Intercommunity Healthcare Center, Park Anaheim Healthcare Center, Pico Rivera Healthcare Center, San Gabriel Convalescent Center, Whittier Pacific Care Center, Studio City Rehabilitation Center, Sunnyview Care Center, View Park Convalescent Center, Western Convalescent Hospital). 

The settlement partially resolves allegations brought in two lawsuits filed by whistleblowers under the qui tam provisions of the False Claims Act, which allows private parties to bring suit on behalf of the government and to share in any recovery.  The whistleblowers, Judy Boyce, Benjamin Monsod, and Keith Pennetti will collectively receive $3,006,000 of the settlement proceeds.

The cases are captioned United States ex rel. Pennetti v. Longwood Management Corp., et al., Case Number CV-14-4133 (C.D. Cal.), and United States ex rel. Boyce, Judy and Monsod, Benjamin v. Aegis Therapies, Inc., GGNSC Holdings LLC, and Longwood Management Corp., CV-16-8050 (C.D. Cal.).  The claims resolved by this agreement are allegations only and there has been no determination of liability. 

Pacira Pharmaceuticals Inc. will pay $3.5 million to resolve allegations that it paid kickbacks to doctors in the form of bogus research grants to induce them to prescribe its analgesic EXPAREL, Attorney for the United States Rachael A. Honig announced July 28. The allegations arose from a whistleblower suit filed under the False Claims Act.

According to documents filed in this case and the contentions of the United States contained in the settlement agreement:

From Dec. 1, 2012, through April 30, 2015, Pacira paid disguised kickbacks in the form of research and other grants to healthcare providers and institutions. Pacira intended these payments to induce sales of its newly-launched local analgesic, EXPAREL, to the targeted physicians and their respective hospitals. The research grants in question were typically initiated by Pacira sales representatives or marketing executives, who discussed internally their sales goals in connection with the grant. Pacira also required that EXPAREL be placed on formulary at the physician's institution before awarding any research grant.

After awarding the grant money, Pacira expressed little interest in the proposed research. Pacira did not contractually require that the grant recipient adhere to the proposed research topic or achieve certain milestones before payment. In many cases, Pacira did not follow up with the grant recipient to ensure that the work was being performed, and in some cases, the grant recipient did no work at all. Pacira did not document why it needed the research or the fair market value of the proposal. Finally, Pacira executives coached grant recipients and other employees on how to avoid internal scrutiny of the grant payments.

Medicare and Medicaid do not pay for claims that include products tainted by illegal kickbacks. Pacira caused the submission of false claims by using these research grants to induce sales of EXPAREL, which it knew would be used in procedures reimbursed by Medicare and Medicaid.

The allegations were raised in a lawsuit filed under the qui tam, or whistleblower, provisions of the False Claims Act, which allows private citizens with knowledge of fraud to bring civil actions on behalf of the Government and to share in any recovery. As part of today's resolution, the whistleblower—a pharmacist who brought the misconduct to the government's attention—will receive approximately $520,000 of the recovery from the federal share of the settlement, plus approximately $118,000 from the state share of the settlement. 

Universal Health Services, Inc., UHS of Delaware, Inc.(together, UHS), and Turning Point Care Center, LLC (Turning Point), a UHS facility located in Moultrie, Georgia, have agreed to pay a combined total of $122 million to resolve alleged violations of the False Claims Act for billing for medically unnecessary inpatient behavioral health services, failing to provide adequate and appropriate services, and paying illegal inducements to federal healthcare beneficiaries, the Department of Justice announced today.  UHS owns and provides management and administrative services to nearly 200 acute care inpatient psychiatric hospitals and residential psychiatric and behavioral treatment facilities nationwide.  UHS is headquartered in King of Prussia, Pennsylvania.

As part of a comprehensive civil settlement, UHS will pay the United States and participating states a total of $117 million to resolve allegations that its hospitals and facilities knowingly submitted false claims for payment to the Medicare, Medicaid, TRICARE, Department of Veterans Affairs, and Federal Employee Health Benefit programs for inpatient behavioral health services that were not reasonable or medically necessary and/or failed to provide adequate and appropriate services for adults and children admitted to UHS facilities across the country.

In a separate civil settlement, Turning Point will pay the United States and the State of Georgia $5 million to resolve allegations that it provided free or discounted transportation services to induce Medicare and Medicaid beneficiaries to seek treatment at Turning Point's inpatient detoxification and rehabilitation program or intensive outpatient program.     

The government alleged that, between January 2006, and December 2018, UHS's facilities admitted federal healthcare beneficiaries who were not eligible for inpatient or residential treatment because their conditions did not require that level of care, while also failing to properly discharge appropriately admitted beneficiaries when they no longer required inpatient care.  The government further alleged that UHS's facilities billed for services not rendered, billed for improper and excessive lengths of stay, failed to provide adequate staffing, training, and/or supervision of staff, and improperly used physical and chemical restraints and seclusion.  In addition, UHS's facilities allegedly failed to develop and/or update individual assessments and treatment plans for patients, failed to provide adequate discharge planning, and failed to provide required individual and group therapy services in accordance with federal and state regulations. 

With respect to Turning Point, the government alleged that, from January 2007 until May 1, 2019, the facility provided free or discounted transportation services to Medicare and Medicaid beneficiaries to induce them to seek detoxification and rehabilitation treatment at Turning Point's inpatient or intensive outpatient programs.

The government's settlement with UHS resolves 18 cases pending in the Eastern District of Pennsylvania, Western District of Michigan, the Eastern District of Michigan, and Northern District of Georgia under the qui tam, or whistleblower, provision of the False Claims Act, which permit private parties to file suit for false claims on behalf of the United States and to share in any recovery.  The whistleblower share of the federal portion of the settlement will be $15,862,457.03.  The settlement with Turning Point resolves an additional qui tam lawsuit filed in the Northern District of Georgia.  The whistleblower in that suit will receive $861,853.64, from the federal share of the Turning Point settlement. 

The civil settlement with UHS resolved the following captioned cases: United States ex rel. Gardner v. Universal Health Services, Inc., 2:17-cv-03332-AB (E.D. Pa.); United States ex rel. Naylor v. Universal Health Services, Inc., 2:14-cv-06198-AB (E.D. Pa.); United States ex rel. Jain v. Universal Health Services, Inc., et al., No. 2:13-cv-06499-AB (E.D. Pa.); United States ex rel. Chisholm v. Universal Health Services, Inc., et al., 2:17-cv-01892-AB (E.D. Pa.); United States ex rel. Doe, et al. v. Universal Health Services, Inc., et al., No. 2:14-cv-00921 (E.D. Pa.); United States ex rel. Pate v. Behavioral Hospital of Bellaire, et al., 2:15-cv-00554-AB (E.D. Pa.); United States ex rel. Brinson, et al. v. Universal Health Services, Inc., et al., 2:14-cv-07275-AB (E.D. Pa.); United States ex rel. Mitchell v. Turning Point Care Center, Inc., et al., 2:15-cv-00259-AB (E.D. Pa.); United States ex rel. Peterson v. Universal Health Services, Inc., et al., 2:17-cv-01897-AB (E.D. Pa.); United States ex rel. Conaway, et al. v. Universal Health Services, Inc., et al., 2:17-cv-02233-AB (E.D. Pa.); United States ex rel. Eborall v. Universal Health Services, Inc., et al., 2:17-cv-03249-AB (E.D. Pa.); United States ex rel. Sachs, et al. v. Universal Health Services, Inc., et al., 2:17-cv-03604-AB (E.D. Pa.); United States ex rel. Klotz v. Universal Health Services, Inc., et al., 2:17-cv-05163-AB (E.D. Pa.); United States ex rel. Brockman, et al. v. Universal Health Services, Inc., et al., 2:17-cv-05350-AB (E.D. Pa.); United States ex rel. Glass v. Hughes Center, LLC., et al., 2:18-04018-AB (E.D. Pa.); United States ex rel. Parent-Leonard v. Forest View Psychiatric Hospital, et al., No. 1:18-cv-1426 (W.D. Mich.); United States ex rel. Russell, et al. v. Universal Healthcare Services, Inc., et al., No. 1:19-CV-0764 (N.D. Ga.); United States ex rel. McLauchlin, et al. v. Havenwyck Holdings, Inc., et al., No. 2:19-cv-10832 (E.D. Mich.). 

The settlement with Turning Point resolved the case captioned United States ex rel. Heatley v Turning Point Care Center LLC, et al., 1:17-cv-3869-AT (N.D. Ga.). 

Piedmont Healthcare, Inc., an Atlanta-based hospital system, has agreed to pay $16 million to settle allegations that it violated the False Claims Act by billing Medicare and Medicaid for procedures at the more expensive inpatient level of care instead of the less costly outpatient or observation level of care. The settlement also resolves allegations that Piedmont paid a commercially unreasonable and above fair market value to acquire Atlanta Cardiology Group in 2007 in violation of the federal Anti-Kickback Statute.

The settlement resolves two separate False Claims Act allegations. First, between 2009 and 2013, Piedmont's case managers allegedly overturned the judgment of its treating physicians on numerous occasions and billed Medicare and Medicaid at the more expensive inpatient level of care even though the treating physicians recommended performing the procedures at the less expensive outpatient or observation level of care. Second, in 2007 Piedmont allegedly acquired the Atlanta Cardiology Group, a physician practice group, in violation of the federal Anti-Kickback Statute by paying a commercially unreasonable and above fair market value for a catheterization lab partly owned by the practice group.

This settlement resolves a lawsuit filed in the U.S. District Court for the Northern District of Georgia by a former Piedmont physician under the qui tam or whistleblower provisions of the False Claims Act, which permit private citizens to bring lawsuits on behalf the United States and obtain a portion of the government's recovery.

The whistleblower in this case will receive $2,967,400.  The case is captioned United States and Georgia ex rel. Doe v. Piedmont Healthcare, Inc. et al., 1:16-CV-780.

Hope Hospice has agreed to pay the United States $3.2 million to resolve allegations that it knowingly submitted false claims to Medicare, Medicaid, and TRICARE for hospice care provided to beneficiaries who did not qualify for the service. Founded in 1979, Hope Hospice is a subsidiary of Hope Healthcare. Hope Healthcare is a not-for-profit organization that provides a variety of programs for the elderly in Lee, Hendry, and Glades Counties, including hospice and palliative care services.

Hospice care is special end-of-life care for terminally ill patients intended to comfort the dying. Patients admitted to hospice care generally stop receiving coverage for traditional medical care intended to cure their illnesses and instead receive medical care focused on providing them with relief from the symptoms, pain, and stress of a terminal illness. Medicare patients are considered to be terminally ill and hospice eligible when they have a life expectancy of six months or less if their illness runs its normal course.

This settlement resolves allegations that Hope Hospice knowingly submitted false claims to Medicare for hospice services for patients who were not terminally ill. According to the settlement agreement, the United States alleged that from July 1, 2012 to June 30, 2016, Hope Hospice billed Medicare for four or more years of hospice care for certain patients who were not terminally ill for at least a portion of their greater than four year hospice stay.

The settlement also resolves allegations that Hope Hospice knowingly submitted false claims to Medicare, Medicaid, and TRICARE for general inpatient (“GIP”) hospice care in circumstances where that higher level of care was not medically necessary. Medicare, Medicaid, and TRICARE reimburse for four different levels of hospice care: routine home care, continuous home care, inpatient respite care, and GIP. GIP is for pain control or symptom management that cannot be managed in other settings, such as a patient's home. GIP is intended to be short-term and is reimbursed at a higher rate than routine home care or inpatient respite care. According to the settlement agreement, the United States alleged that Hope Hospice knowingly submitted false claims from January 1, 2011 to June 30, 2016, to Medicare, Medicaid and TRICARE for unnecessary GIP hospice care for certain patients for whom Hope Hospice billed for over two weeks of GIP care. 

As part of the settlement, Hope Hospice has agreed to enter into a Corporate Integrity Agreement (CIA) with HHS OIG. The CIA promotes compliance with the statutes, regulations, program requirements, and written directives of Medicare, Medicaid, and all other federal health care programs, specifically dealing with, among other things, the proper billing and submission of reimbursement claims by Hope Hospice.

The settlement concludes a lawsuit originally filed in the United States District Court for the Middle District of Florida by Margaret Peters who formerly worked at Hope Hospice as the Director of Hospice Care. Peters sued under the qui tam, or whistleblower, provisions of the False Claims Act permitting a private citizen to sue on behalf of the United States for false claims and to share in the recovery. The case is captioned U.S. and the State of Florida ex rel. Margaret Peters v. Hope Hospice and Community Services, et al, No. 2:16-cv-6-FtM-99MRM. The Act also allows the United States to intervene and prosecute the action. Peters will receive 19% of the proceeds from the settlement with Hope Hospice.

Oklahoma Center for Orthopaedic and Multi-Specialty Surgery (OCOM), a specialty hospital in Oklahoma City, Oklahoma, its part-owner and management company, USP OKC, Inc. and USP OKC Manager, Inc. (collectively USP), Southwest Orthopaedic Specialists, PLLC (SOS), an Oklahoma City-based physician group, and two SOS physicians, will pay $72.3 million to resolve allegations under the False Claims Act and the Oklahoma Medicaid False Claims Act of improper relationships between OCOM and SOS, resulting in the submission of false claims to the Medicare, Medicaid and TRICARE programs, the Justice Department announced.    

The Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid, and other federally funded programs.  The Physician Self-Referral Law, commonly known as the Stark Law, prohibits a hospital from billing Medicare for certain services referred by physicians with whom the hospital has an improper financial arrangement, including the payment of compensation that exceeds the fair market value of the services actually provided by the physician and the provision of free or below-market rent and office staff.  Both the Anti-Kickback Statute and the Stark Law are intended to ensure that physicians' medical judgments are not compromised by improper financial incentives and instead are based on the best interests of their patients.

The settlement resolves allegations that between 2006 and 2018, OCOM and USP provided improper remuneration to SOS and certain of its physicians in exchange for patient referrals to OCOM in the form of (i) free or below-fair market value office space, employees, and supplies, (ii) compensation in excess of fair market value for the services provided by SOS and certain of its physicians, (iii) equity buyback provisions and payments for certain SOS physicians that exceeded fair market value, and (iv) preferential investment opportunities in connection with the provision of anesthesia services at OCOM.  The alleged conduct resulted in the submission of claims for services provided to these illegally referred patients, in violation of the False Claims Act and the Oklahoma Medicaid False Claims Act.  The settlement also resolves issues arising out of USP's preferential offering of investment opportunities to physicians at four surgery facilities in Texas.  As a result of this settlement, USP will pay $60.86 million to the United States, $5 million to the State of Oklahoma, and $206,000 to the State of Texas.  SOS and two of its physicians, Anthony L. Cruse, D.O. and R.J. Langerman, Jr., D.O., will pay $5.7 million to the United States, and $495,619 to the State of Oklahoma.

Contemporaneous with the civil settlement, OCOM and SOS each entered into five-year Corporate Integrity Agreements (CIAs) with the U.S. Department of Health and Human Services – Office of Inspector General (HHS-OIG).  The CIAs require, among other things, that OCOM and SOS each maintain a compliance program and hire an Independent Review Organization to review arrangements entered into by or on behalf of their respective entities.  They also increase individual accountability by requiring compliance-related certifications from their key executives. 

The allegations resolved by the settlement were brought in a lawsuit filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the United States for false claims and to receive a share of any recovery.  The whistleblower also alleged claims under the Oklahoma Medicaid False Claims Act.  The qui tam case is captioned United States ex rel. Allison v. Southwest orthopaedic Specialists, PLLC, et al., No. CIV-16-569 (W.D. Okla.).  The whistleblower share to be awarded in the case has not yet been determined.