This Week’s FCA Update Includes Rhine Drug Company Fraud and Florida MCO Risk Adjustment Fraud

Last week, a pharmacy and drug company settled False Claims Act (“FCA”) lawsuits for millions of dollars.  The allegations focused on violations of the FCA and Controlled Substances Act.  Specifically, the pharmacists billed government agencies such as Medicare for more than they actually dispensed and did not keep accurate records of the prescription drugs that they dispensed.  While so doing, the pharmacists, either at the encouragement of the drug company of not, received financial gains at the expense of the government and thereby the U.S. taxpayers.  These reprehensible violations are sadly performed throughout the country and it is up to Whistleblowers to stem them out by reporting them to capable attorneys.  The employment FCA whistleblower attorneys who are then able to best represent the case and have the relationships with the government to pursue the injustice will maximize the returns for any settlement or lawsuit.

In another settlement, Medicare Advantage Organizations in Florida settled with the government for $32.5 million dollars for alleged FCA violations surrounding risk-adjustment fraud.  These included allegations that the insurers violated the FCA by allowing illegal schemes to maximize the payment that the insurers were to get from the government.  The insurers took advantage of risk adjustment used by the Centers for Medicare and Medicaid Services (“CMS”) so that extra payments will be made to their Managed Care Organizations for patients who were supposedly sicker or suffered multiple conditions.    Here, we had insurance companies that either submitted or caused others to submit unsupported diagnosis codes to CMS.  Hence, these inflated the reimbursement that the insurance companies would receive from CMS.

Under the FCA, the Judge is entitled to order the defendant to pay triple the actual damages that the jury finds.  In addition, the FCA also permits statutory penalties from $5,500 to $11,000 for each false claim submitted by the defendant.  As result, the whistleblower will receive approximately 15 to 25 percent of the total FCA recovery plus attorney’s fees.

As the main enforcement arm of the federal government, the Justice Department reviews all cases filed under the FCA.   Then, once the whistleblower case is assessed, the government decides whether it will prosecute or allow the whistleblower to bring the complaint on the government’s behalf.

The FCA is used to stem out fraud related to billing, staffing, and kickbacks. Examples of these are when financial companies are supposed to abide by state and federal laws and chose to ignore them.  They also bills for services that were not provided or the bill was submitted at an improperly higher rate of reimbursement for the services.  In addition, financial companies are often fount to illegally bill the government for substandard services by fraudulently certifying otherwise. Alternatively, these companies may realize that they have credit from their services that they have to repay to the government, but the companies do not reimburse the government within the 60 day time frame.  See these blogs for more examples of the FCA.

If you witness any potential false claims in California (i.e. requests for reimbursement to the government, not actually rendering work when reimbursement is received, or receiving and knowingly retaining an overpayment) by your company, or you are retaliated against for voicing your concern about potential wrongdoing, immediate action is vital.  Contact the experienced employment law attorneys at Stephen Danz & Associates for a free consultation to discuss your circumstances and legal options.