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Good Shepherd Hospice Inc. to Pay $4 Million Amid False Claims Act Allegations

Posted by on Thursday, February 19th, 2015

An Oklahoma-based hospice company with facilities across the Midwest has agreed to settle claims of fraudulent billing practices. The case was handled by the U.S. Attorney’s Office for the Western District of Missouri.
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In today’s case, we explore a somewhat increasing phenomenon of unlawful and fraudulent billing practices pertaining to palliative (i.e., end of life) care. When it comes to palliative care, Medicaid and Medicare enrollees may receive coverage for hospice services as long as certain criteria are met. Namely, there must be certification from a doctor that the patient is suffering from a terminal condition likely to result in the natural end of life within six months. Additionally, once a patient is classified as end-of-life, doctors and nurses are no longer meant to perform rehabilitative or curative procedures on the patient, and are only to make the patient comfortable and at peace during the end-of-life process.

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ResCare Iowa, Inc. to Pay Over $5 Million to Settle Healthcare Fraud Allegations

Posted by on Wednesday, February 18th, 2015

ResCare Iowa settles healthcare fraud claims

An Iowa home-based nursing care company has agreed to pay $5.63 million to settle claims it unlawfully billed for unnecessary skilled nursing services in patients’ homes.
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Home-based nursing care is considered somewhat of a luxury under government healthcare regulations. This means there are limited circumstances under which programs like Medicare, Medicaid, or TRICARE will reimburse a company for home-based services. Patients must meet strict eligibility criteria prior to receiving reimbursement. Under current guidelines, a medical doctor must certify that home-based nursing care is medically necessary, that the patient is completely homebound, and that traveling to a clinic or doctor’s office for assistance would be impossible or extremely difficult for the patient. If the patient does not meet these standards, he or she is expected to seek medical treatment at a covered facility, which will naturally result in a much lower reimbursement rate.

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Community Health Systems Settles Medicaid Fraud Allegations for $75 Million

Posted by on Tuesday, February 17th, 2015

Community Health Systems Medicaid fraud

Community Health Systems accused of Medicaid fraud in New Mexico.
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A recent press release from the Department of Justice alleged that several hospitals within the nationwide Community Health System (CHS) chain made unlawful donations to various county governments in violation of state and federal Medicaid laws. The scheme occurred under New Mexico’s supplemental Medicaid program, which primarily served rural and under-served communities. This program ended in 2014.
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Veteran Construction Associates Settles False Veteran Status Claim

Posted by on Monday, February 16th, 2015

Veteran Construction Associates accused of fraud

Veteran Construction Associates is alleged to have falsified workers’ veteran status information to obtain contracts.
Image source: Wikimedia Commons

Under the federal False Claims Act, it is unlawful for individuals and businesses to submit claims for reimbursement or funding based on fraudulent, falsified, or exaggerated facts. If a company submits improper claims and evidence shows there was intent to defraud (as opposed to accidental fraud), the business may have to pay up to three times the actual financial damages plus statutory damages.

The False Claims Act allows private citizens, referred to as whistleblowers or relators, to file lawsuits alleging fraudulent misconduct. The government may join the lawsuit, at its discretion. For their part in exposing fraud against the government, a relator may receive up to 30% of any recovery made on behalf of the government.

As this blog has revealed, misconduct under the False Claims Act most often falls under the category of Medicare or Medicaid fraud or fraud against the Department of Health and Human Services. However, the False Claim Act only covers a small range of potentially fraudulent activity against the government and scammers are developing new ways to defraud U.S. taxpayers every day.

In today’s case, we examine a recent $1.3 million settlement between a New Jersey-based construction company and the United States Department of Veteran Affairs. The VA established several programs to benefit small businesses owned by disabled veterans and it was these programs the accused used to defraud the government.

Details of the case against Veteran Construction Associates

The facts of this False Claims Act settlement are particularly unsavory, including the falsification of required certifications naming a business owner as a disabled veteran when, in fact, he was not. According to the allegations, Veteran Construction Associates listed its majority equity owner as a veteran disabled by a service-related injury. This false claim allowed the company to procure over $6 million in federal government contracts for construction work.

The government sets aside a limited number of lucrative contract opportunities across several different industries solely for disabled veterans. By defrauding this program, the defendants – who admitted liability for their actions – not only ripped off U.S. taxpayers, but potentially denied other disabled veterans from the opportunity to obtain government contracts. In reality, the service-disabled veteran listed as the owner was not an owner at all and the true owner of Veteran Construction Associates were several non-veteran, non-disabled individuals.

The government’s response

Government officials worked to bring the fraudsters to justice and have banned Veteran Construction Associates from procuring contracts through the Department of Veteran Affairs for a period of three years. The U.S. Attorney’s Office in New Jersey commented, “The settlement resolves allegations that Veteran Construction was not owned and controlled by a service-disabled veteran, and thus should neither have received the government contracts, nor invoiced the government for work performed on those contracts….”

This the second veteran fraud case in New Jersey over the past year, and the accused in that case served eight months in jail for falsely claiming her business was owned by a disabled veteran and obtaining nearly $1.2 million in federal contracts.

Contact Berger & Montague, P.C. today

If you are aware of fraud under a government contract or believe your employer may be unlawfully obtaining federal funds, please contact an experienced whistleblower attorney at Berger & Montague, P.C. today.

Dental Clinic Sea Mar Health Center Settles False Claims Act Allegations

Posted by on Friday, February 13th, 2015

A Washington dentists’ office has agreed to pay $3.35 million to settle claims it defrauded and overbilled Medicaid.
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The Washington Attorney General’s Office is lauding its recent recovery of $3.35 million on behalf of state taxpayers and the state Medicaid program. In today’s case, we explore a recent recovery involving the nearly decade-long overbilling scheme alleged to have been perpetrated by a Seattle-area dentists’ office regularly treating both pediatric and adult Medicaid enrollees. According to the allegations, the center regularly unbundled certain routine dental care services in favor of having patients return for a separate appointment with a dental hygienist or dentist, at an increased rate, for medically unnecessary procedures and dental treatments.

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False Claims Act Defendant Loses Bid to Overrule Oral Settlement Agreement

Posted by on Thursday, February 12th, 2015

In a recent holding out of San Francisco, California, a district magistrate has ruled to uphold oral promises made during the negotiation of a False Claims Act settlement with San Francisco’s Northeast Medical Services, Inc.
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As we have explored in the past, many False Claims Act lawsuits end in a negotiated settlement between the relator/whistleblower, federal government, and defendants alleged to have committed fraudulent acts of misconduct against U.S. taxpayers. The terms of the settlement – which almost always include a clause disclaiming any liability by the defendant – are reduced to writing and eventually submitted to the judge or magistrate tasked with overseeing the False Claims Act lawsuit. Assuming there are no blaring public policy concerns or major issues with the agreement, the parties are generally free to decide upon the terms of the settlement that best reflect the goals of each party, and the agreement becomes an enforceable component of the court’s final order.

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Drone Manufacturer Composite Engineering, Inc. Settles False Claims Act Allegations

Posted by on Wednesday, February 11th, 2015

A Sacramento drone manufacturer has agreed to settle False Claims Act allegations occurring under a defense contract.
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The False Claims Act is one of the most successful federal statutes when it comes to recouping money lost due to wasteful fraud committed against the government and, as a result, the taxpayers. When it was enacted, soldiers and other participants in the U.S. Civil War were experiencing widespread fraud under government contracts for the provisions of war materials. Historians recount stories involving contracts for uniforms, armor, and supplies between the armies and various contractors that resulted in infantrymen receiving damaged or used goods – or no goods at all. As a result, Congress opted to enact the False Claims Act to incentivize those with information relating to defense contractor fraud to come forward and the Act has stood the test of time.

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Securities Ratings Firm Standard & Poor’s Settles Fraud Charges for $58 Million

Posted by on Tuesday, February 10th, 2015

Standard & Poor securities fraud

Ratings firm Standard & Poor’s has agreed to settle claims of fraudulent classification of mortgage-backed securities for a sum of $58 million.
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In a victory for the Securities and Exchange Commission, the securities ratings firm Standard & Poor’s has agreed to settle claims it fraudulently certified certain mortgage-backed securities as good investments, as well as claims the firm used a certain methodology to calculate risk with regard to commercial mortgage-based securities when, in fact, a different and undisclosed method was used. The settlement addresses several claims of fraud by both federal regulators and several states, including Massachusetts and New York. What’s more, Standard and Poor’s is prohibited from engaging in certain commercial mortgage-backed securities transactions for one year.

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Court’s Analysis Spells Victory for Bibby Relators Following Contested False Claims Act Reward

Posted by on Monday, February 9th, 2015

Wells Fargo involved in Bibby case

Wells Fargo was ultimately unsuccessful in its bid to have the relators’ reward vacated, as held by the Eleventh Circuit in January 2015.
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Over the last few posts, we have engaged in an in-depth look at a relatively rare issue involving confidentiality during the investigative stage of a False Claims Act whistleblower case. The case, known as United States ex rel. Bibby v. Wells Fargo, N.A., has garnered some national attention as the Eleventh Circuit recently upheld the relators’ $43 million reward, while imposing a relatively minor sanction.

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Exploring the Bibby Case: Where Did the Relators Go Wrong?

Posted by on Friday, February 6th, 2015

Bibby case

The relators in the Bibby case were sanctioned for discussing the details of the case with the news media before the case was unsealed.
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As we discussed in yesterday’s post, the Eleventh Circuit recently handed down a ruling in a case of first impression: What sort of punishment should a relator face for breaching confidentiality rules during the investigative stage of a whistleblower action? We reviewed the rules of filing under seal and why this is an important step in the overall False Claims Act lawsuit process. It is especially important in the Bibby case, which involves relators pitted against Wells Fargo alleging undercurrents of fraud pursuant to loans made to veterans.

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