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New Jersey District Court Denies PharMerica’s Motion to Dismiss in Ongoing Omnicare Case

Omnicare case

District Court rules in favor of relator Marc Silver in his whistleblower case against Omnicare, Inc. et al. based on Third Circuit precedent.
Image source: Wikimedia Commons

As you may recall, our law firm has maintained a steadfast involvement in the False Claims Act case against pharmacy services giants Omnicare, Inc. and Pharmerica, representing pharmacist relator Marc Silver in his quest to expose the defendant’s ongoing fraud committed against Medicare and Medicaid. In a recent order entered by District Judge Hillman, the defendant’s recent motion to dismiss was denied in part, granting the motion only as to the defendant’s statute of limitations claims for federal False Claims Act allegations occurring prior to March 4, 2005. In today’s post, we review the background details of the case, as well as discuss the court’s reasoning in denying the defendant’s bid to dismiss the case. In tomorrow’s post, we will look at the flourishing Foglia standard and how it has taken hold of the federal Third Circuit.

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Tennessee District Court Approves Statistical Sampling in Pivotal False Claims Act Case

Tennessee District Court denies the defendant’s motion for summary judgment–citing the reliability and efficiency of statistical sampling in False Claims Act cases containing voluminous patient records.

 

As we discussed yesterday, the False Claims Act is often triggered by widespread, pervasive, long-term fraudulent behavior–resulting in voluminous records and hundreds of thousands of invoices evidencing the fraudulent misconduct. As a result, courts have begun to consider whether the use of a statistical random sample of admissions or patient files is an appropriate means by which the relator or federal government, or both, can establish liability on the part of a defendant. Understandably, defendants are loath to establish this standard, as using statistical samples will presumably make establishing False Claims Act liability easier and more efficient. By contrast, plaintiffs assert that the use of statistical sampling, when conducted correctly, paints a clear picture of fraud and misconduct while not overburdening the court with excessive and duplicative evidence.

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District Court Allows Use of Sampling in Complex False Claims Act Case Against LifeCare

The Tennessee District Court recently considered whether statistical sampling is appropriate for use in False Claims Act cases.

 

As you can likely imagine, the sheer volume of evidence that emerges during the investigation and discovery phases of a False Claims Act case can quickly overwhelm the court and create logistical difficulty for the party tasked with presenting such evidence to support an assertion of liability. For instance, if a widespread, national pharmacy services organization or hospital management company is engaging in fraud as part of its regular business practice, the number of potential false claims–which include any submission for repayment on behalf of any Medicare, Medicaid, or TRICARE enrollee–could quickly reach the hundreds of thousands. For this reason, courts have begun to consider the use of statistical sampling to allow plaintiffs (i.e., the relator and federal government) the opportunity to expose the breadth of the fraudulent activity while still presenting a manageable sample case to the court.

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Pennsylvania Appellate Court Considers Confidential Nature of Qui Tam Actions in Light of Insurance Policy

qui tam

The Pennsylvania Superior Court recently denied professional liability coverage under the premise the sealed complaint was already filed prior to the start date of the policy.
Image source: Wikimedia Commons

 

In the corporate world, companies often take out extensive insurance policies to protect against the inevitable financial harms following a civil lawsuit. Much like any other insurance policy, the insurer will usually include language in the policy terms excluding coverage for any pending lawsuits filed or commenced prior to the start date of the policy. In a recent case arising out of a Pennsylvania appellate court, the appellant (appealing party), AmerisourceBergen Corp., sought judicial review of the appellee insurance company’s refusal to cover the costs of a False Claims Act case filed against Amerisource. The appellant raised an interesting argument against the claim refusal premised on the confidential, in camera nature of False Claims Act filings – claiming it should not be denied coverage for a pending False Claims Act case that was not filed pursuant to the typical civil procedure process.

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Shire Pharmaceuticals to Pay $56 Million to Settle False Claims Act Allegations

Shire Pharmaceuticals, maker of popular ADHD drug Adderall, has paid over $56 million to settle claims it improperly marketed the drug.
Image source: Wikimedia Commons

 

According to a recent announcement by the Department of Justice, Shire Pharmaceuticals has agreed to pay $56 million to settle claims it fraudulently marketed the popular attention-deficit drug Adderall and thereafter submitted claims to U.S. government healthcare programs for reimbursement. The allegations differ from the oft-cited problem of “off-label marketing,” which occurs when a company markets a drug to treat conditions not previously tested by the FDA. In this case, Shire was marketing to an approved class of patients (those suffering from attention-deficient hyperactivity disorder) but is alleged to have made inaccurate statements about the effectiveness and safety of the drug.

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CVS Caremark Corporation Settles False Claims Act Allegations for $6 Million

CVS’s pharmacy benefit management company Caremark agreed to settle False Claims Act healthcare fraud allegations for $6 million.
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In several prior posts, we have discussed the ongoing battle against “reverse false claims” involving Medicare and Medicaid patients. In general, a reverse false claim occurs when a healthcare provider or government contractor receives overpayment for an invoice and knowingly fails to issue a refund or reimbursement to the government. In general, if a private government service provider receives overpayment, it has 60 days to send the money back – or serious consequences could result.

In today’s case, pharmacy benefit management company Caremark Corp. – which is operated by pharmacy giant CVS – has agreed to pay $6 million to settle False Claims Act allegations it failed to return payments from Medicaid and Medicare that should have been covered by a private insurer. The company has not admitted liability in the matter, however.

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Department of Justice Announces Plans to Enhance Scrutiny of False Claims Act Complaints

The Department of Justice has announced its plans to further scrutinize False Claims Act filings for potential parallel criminal investigations and prosecution, which could include a criminal investigation by the FBI.

Earlier this month, the Department of Justice announced its plans to enhance and fortify the review process upon receipt of a complaint filed under the False Claims Act. Complaints, which are filed confidentially and under seal, often set forth highly-specific and complex fact patterns detailing years-long abuse of federal or state funds. One of the primary areas targeted by the False Claims Act involves fraud against the Medicare and Medicaid systems, and prosecutors have uncovered billions of dollars over the past several years from deceitful and dishonest healthcare providers. Moving forward, the Department has promised to implement even deeper checks and reviews of qui tam complaints to determine if a defendant’s actions rise to the level of criminal culpability.

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SEC Announces Highest Whistleblower Reward on Record

SEC highest whistleblower reward on record

The SEC announced a historic $30 million whistleblower reward in late September, making it the highest award to date.

 

In light of the 2008 financial crisis – which was propelled primarily by corporate misconduct and serious Wall Street delinquency – the 2010 Dodd-Frank Act was created in order to not only police investor transgressions but to incentivize those with knowledge of possible securities fraud to come forward and report their information to confidential federal authorities. While the SEC’s whistleblower program does not get as much press and exposure as the False Claims Act, its rewards are often staggering, including a recent $30 million whistleblower award offered to a relator having come forward with information about corporate and financial fraud.

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Novartis Pharmaceuticals to Face Possible False Claims Act Liability for Kickbacks

European drug maker Novartis is facing False Claims Act liability for offering unbelievable kickbacks to physicians, including a $9,000 Japanese dinner for three.
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Swiss-based Novartis Pharmaceuticals has been subjected to possible liability under the False Claims Act – and a federal judge in New York recently concluded the case may continue. In U.S. ex rel. Bilotti v. Novartis Pharmaceuticals Corp., a whistleblower brought to light several issues involving the drug maker, most notably its business model involving exorbitant and blatant kickbacks offered to doctors in exchange for the promise to use its products. Despite years of procedural wrangling by the defendant – particularly since it is facing two separate lawsuits for misconduct pertaining to various pharmaceutical drugs – U.S. District Judge Paul Gardephe in Manhattan issued a 90-page ruling allowing the case, and the subsequent intervention by the Department of Justice, to continue. The government is seeking reimbursement for money expended due to false claims, as well as treble damages.

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Virginia Attorney General Initiates Record-Shattering False Claims Act Lawsuit

False Claims Act allegations

Commonwealth of Virginia Attorney General Mark R. Herring has initiated a $1.15 billion False Claims Act lawsuit against 13 banks for fraudulently misleading the Virginia Retirement System.
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Earlier this month, Virginia Attorney General Mark R. Herring announced a record $1.15 billion lawsuit against several major banking institutions. The lawsuit stems from the rampant misconduct that eventually gave rise to the 2008 housing bubble, and includes the following defendants:

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