Monday, August 29, 2005

Caremark Faces Growing Number of Qui Tam Suits

A Medicaid fraud investigation targeting Caremark, one of the nation’s largest pharmacy benefit managers, could soon cause more pain, according to a story today in TheStreet.com.

Already, at least five states have joined with the federal government in an effort to recover money from Caremark that they feel belongs to the Medicaid program. But laws could permit as many as 10 more states, along with the District of Columbia, to demand similar repayments, along with substantial penalties.  Total damages could exceed $500 million, according to a newly expanded whistleblower lawsuit filed just over a week ago.

Caremark denies wrongdoing, but the allegations themselves seem to be taking a toll: This month alone, press reports show, county officials in at least two states have questioned whether they should be conducting business with a company suspected of engaging in Medicaid fraud. For the full story, click here.

Tuesday, August 23, 2005

Federal Agents Search Florida Chain of MRI Centers after Lawsuit Alleges Overbilling

A chain of high-profile medical imaging centers in Boca Raton has come under federal review after an ex-employee contended in a lawsuit the centers overbilled Medicare and illegally paid doctors to send patients for tests, according to a story in the Florida Sun-Sentinel.

Agents from Medicare and the U.S. Postal Service in May searched the offices of University MRI, headed by Dr. Fred L. Steinberg, and subsequently visited two dozen local doctors named in the whistleblower’s federal lawsuit as having taken payments from Steinberg’s firms. Steinberg, through an attorney, denied any wrongdoing by his centers, one of the largest operations in South Florida performing MRIs, CT scans, ultrasounds and other imaging tests. Still, the case sent ripples through South Florida’s medical community.

For the complete story, click here.

Monday, August 22, 2005

Illinois County Considers Extending Whistleblower Laws to Cover Non-Government Employees

McHenry County is considering becoming the second county in the state of Illinois to adopt a law to protect anyone with knowledge of scams involving government, according to a story in the August 19 edition of The Chicago Tribune.

The state legislature amended the Illinois Whistleblower Reward and Protection Act in 1995 to allow local governments to adopt the law as part of their local ordinances. But since then, only a handful of municipalities, school districts and other taxing bodies have passed the law. The pace has picked up over the last two years, with Cook County and the City of Chicago passing versions of the law. But some watchdogs wish more local governments would follow suit.

Click here to read the full account.

Westchester County (NY) Hosptial to Pay $2.65 Million to Settle Fraud Claim

Mount Vernon Hospital has agreed to pay $2.65 million to settle a claim that it participated in an illegal Medicaid referral scheme involving kickbacks for patients who sought alcohol and substance abuse services, according to a recent report in The Journal News. The hospital, which did not admit any wrongdoing, agreed to pay back the federal government over the next five years, according to the U.S. Attorney’s Office.

The case, which was brought to the government’s attention by a whistleblower, centered on payments made to Applied CaseManagement Inc. of New York City from 1997 to 2004. The hospital paid the consulting company $60,000 a month to provide administrative services, including patient referrals, for its alcohol and substance abuse treatment program, according to the government. The government alleged that the services were not needed or were worthless and that the hospital was really paying only for patient referrals, something that violates state and federal regulations.

The case came to light after a whistleblower filed a lawsuit under the federal False Claims Act, said David Koenigsberg, a lawyer for the whistleblower. The U.S. Attorney’s Office then decided to open its own investigation into the hospital. The whistleblower, who was identified in government papers as John F. Reilly, who worked for a company affiliated with Applied CaseManagement, will receive $530,000 because the case was successful, Koenigsberg said. The hospital also will be required to pay his legal fees.

For the full story, click here.

Thursday, August 18, 2005

Anthem Insurance to Pay U.S. $1.5 Million for Overcharging Federal Health Benefits Program

Anthem Insurance Companies will pay the United States $1.5 million to settle allegations that the company overcharged the Federal Employee Health Benefits Program (FEHBP), the Justice Department announced today. The Indiana corporation has served as a contractor within the FEHBP.

The government alleges that Anthem included profit in the cost of certain services billed to the program by a company under common corporate control and improperly calculated the amount of drug rebates due the program. The allegations relate to the period from 1992 through 2002. The settlement resolves a qui tam, or whistleblower, suit brought against Anthem under the False Claims Act.

Click here to read entire government press release on the settlement on i-Newswire.

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