Qui Tam Whistleblower Recoveries under False Claims Acts (Federal and State) in 2008

Some recent significant recoveries under the False Claims Act–the nation’s primary tool for fighting fraud and false claims–are summarized below. This summary is part of a paper I submitted in connection with serving on the faculty (with some excellent attorneys) of the “Southeastern Health Care Fraud Institute” on December 18, 2008.

Health care attorneys will gather at the Institute to discuss developments under the qui tam provisions of the nation’s major whistleblower statute, the False Claims Act, as well as other issues relating to fraud in the health care industry.

Recent Significant False Claims Act Recoveries
(as reported by www.taf.org)

Merck ($650 million settlement in February 2008, arising from allegations of nominal pricing fraud, and kickback and best price violations for the arthritis drug Vioxx, the cholesterol drug Zocor, the acid-reflux drug Pepcid, the hypertensive medication Cozaar, the bone loss drug Fosamax, the migraine medication Maxalt, and the asthma medication Singulair.)

Cephalon ($375 million settlement in November 2007 arising from alleged off-label marketing of narcotic lollipop Actiq (Afentanyl citrate@) as well as Gabitril (an epilepsy medication) and Provigil (a narcolepsy medication.)

Amerigroup ($225 million settlement in July 2008, which was the final settlement after jury trial over allegations that the defendant was Acherry-picking@ the healthiest patients to reduce Medicaid HMO liability/spending.)

Staten Island University Hospital ($88 million settlement in September 2008, based on allegations that the hospital fraudulently billed Medicaid and Medicare for inpatient alcohol and substance abuse detoxification treatment beds for which it did not have verification, fraudulently inflated its patient count, and fraudulently billed Medicare for stereotactic body radiosurgery treatment that was provided on an out-patient basis to cancer patients.)

Medtronic/Kyphon ($75 million settlement in May 2008, after Kyphon was alleged to have improperly advised customers to bill its kyphonplasty procedure B a minimally invasive surgery used to treat spine fractures B as an inpatient procedure.)

CoxHealth ($60 million settlement in July 2008, over allegations that Cox improperly billed for end stage renal disease treatments.)

Pratt and Whitney ($52 million settlement in August 2008, based on allegations that Pratt & Whitney and PCC (a P&W subsidiary) allegedly knowingly sold defective turbine blade replacements for jet engines used in F-15 and F-16 fighter aircraft used by the U.S. Air Force.)

Hanson Building Materials ($42 million settlement in December 2007, based on allegations that the company improperly mined sand from Suisun and San Francisco bays and defrauded the state out of millions of dollars in royalties.)

CVS ($37 million settlement in March 2008, after allegations of illegally changing generic Zantac7 prescriptions from tablets to higher priced capsules.)

WellCare ($35.2 million settlement in August 2008, reportedly paid as a deposit for larger False Claims Act violations alleged and still being examined.)

Walgreens ($35 million settlement in June 2008, based on allegations of switching dosage forms in filling generic Prozac7, Zantac7 and Eldepryl7 prescriptions.)

Healthfirst ($35 million settlement in September 2008, based on allegations that Healthfirst, the largest Medicaid Managed Care provider in New York, violated state and federal contracts by paying bonuses to employees based on the number of people they enrolled in managed care.)

National Air Cargo ($28 million settlement in March 2008, arising from alleged billings to Defense Department.)

Abbott (TX) ($28 million settlement in September 2008, based on allegations of Average Wholesale Price violations and causing the state to overpay for prescription drugs.)

Cigna, Express Scripts ($27 million settlement in July 2008, arising from allegations that ExpressScripts disguised drug rebates as administrative and other fees and switched patients from one drug to another without doctor=s authorization.)