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State Enforcement Actions

Each state enforces its laws and defends its interests, and states often work with the federal government in investigating and prosecuting corporate frauds.  Whistleblowers with knowledge of fraud or wrongful conduct that involves state or local funds or programs may be able to bring a claim under a state or local False Claims Act, and may be eligible to receive a monetary reward and protection against retaliation.

Below are summaries of recent settlements, successful prosecutions, and enforcement actions by states. If you believe you have information about fraud which could give rise to a claim under a State or Local False Claims Act or other whistleblower reward provision, please contact us to speak with one of our experienced whistleblower attorneys.

June 29, 2015

New York announced a settlement with pharmacy Trinity Homecare LLC that returns $2.5 million to the state’s Medicaid program. A whistleblower filed a lawsuit in 2009 alleging that Trinity pushed infusion drugs, which are prescribed to manage symptoms, to hemophilia patients and presented claims to Medicaid for unneeded or excessive quantity of these drugs. The whistleblower alleged improper billing for drug deliveries, including ones that patients refused to accept and excess shipments. In at least one instance, these expensive drugs were allegedly left outside a patient’s home without signature by the patient.

June 23, 2015

Georgia announced a prison sentence for the owner of Senior Care of Columbus, Inc., following her guilty plea to Medicaid fraud and related charges. From 2009 until 2011, the defendant submitted numerous fraudulent claims for and was reimbursed for services that were not provided to patients. An extraordinarily high percentage of claims submitted by defendant for reimbursement to Georgia Medicaid lacked any documentation, and it was discovered that in many instances, the defendant billed Medicaid on days when patients received no services at all, and for patients who had been discharged.

June 18, 2015

47 states and the District of Columbia reached a settlement with Inspire Pharmaceuticals, resolving allegations that Inspire violated state and federal False Claims Act laws by illegally marketing the drug Azasite for off-label uses not approved by the U.S. Food and Drug Administration. Approved only for the treatment of bacterial conjunctivitis (“pink eye”), Inspire marketed Azasite for the treatment of blepharitis, an inflammation of the eyelash follicles. While physicians are permitted to prescribe drugs for conditions other than those for which the drugs have been approved by the FDA, pharmaceutical companies are prohibited from marketing drugs to physicians for such off label conditions. It is contended that, as a result of Inspire’s illegal off label promotion, Inspire caused the submission of false and fraudulent claims for Azasite to the Medicaid program and other federal programs.

June 18, 2015

Florida joined the federal government in announcing charges against 73 South Florida residents for their alleged participation in various schemes to defraud Medicare and Medicaid out of more than $262 million. FL

June 18, 2015

Connecticut commenced a case under that state’s False Claims Act against the co-owners of a psychiatric clinic alleged to have submitted false claims to the state’s Medicaid program, Connecticut Medical Assistance Program (CMAP), from January 2010 through December 2014. According to the complaint, the defendants illegally submitted false claims for reimbursement while knowingly retaining and concealing the overpayment. The psychiatrist is alleged to have engaged in a systemic practice of knowingly “upcoding” the claims for reimbursement she submitted to the CMAP. For example, as the complaint alleges, she routinely double, triple, and in some cases quadruple-booked appointments for her Medicaid patients, then submitted CMAP using a reimbursement code, which required her to see the patient for approximately 75 to 80 minutes when, in fact, she saw each patient for as little as 5-10 minutes. The state’s complaint identifies 113 days where the psychaitrist billed the CMAP for more than 24 hours of service. Both defendants are also alleged to have attempted to conceal from state auditors the existence of databases that contained information which would have established evidence that the claims were false.

June 11, 2015

Louisiana announced that its Medicaid program will receive over $5 million as a result of a settlement between specialty pharmacy company Accredo Health Group, Inc. and 40 states and the federal government, resolving allegations that Accredo engaged in a scheme with drugmaker Novartis to boost sales of the drug Exjade, which is used to treat chronic iron overload due to blood transfusions. Accredo is accused of improperly directing nurses to contact Medicaid beneficiaries to encourage continued use of Exjade. Accredo’s goal in the scheme was to earn higher sales revenue, additional dispensing fees and more rebates from Novartis. The nurses were directed to discuss Exjade’s common side effects, but not its less common but more severe possible side effects such as kidney or liver problems.

June 10, 2015

New Mexico issued a request for proposals (RFP) seeking a forensic audit firm to assist with the continuing investigations of 12 behavioral health providers referred to the Office of the Attorney General by the state’s Human Services Department. The RFP, which requires completion within six months of issuance of a contract, expands the Attorney General’s resources already dedicated to an investigation of allegations of $36 million in Medicaid fraud that was used as the basis for terminating New Mexico contracts with 15 behavioral health providers.

June 10, 2015

a Georgia dentist was convicted for misuse of Medicaid funds, pleading guilty to criminal charges and civilly settled allegations of fraud for $324,327.05. According to the allegations, the defendant knowingly billed for services provided on certain days when he was not in the office. On those days, unqualified staff performed services, which were then billed as if the dentist had performed the services. In connection with his plea, the defendant also surrendered his license to practice dentistry.

June 9, 2015

Michigan’s Health Care Fraud Division received recognition from the Office of Inspector General for the United States Department of Health and Human Services (HHS-OIG) in the form of HHS-OIG’s annual Excellence in Fighting Fraud, Waste and Abuse award. In granting the award, HHS-OIG noted that during fiscal year 2014, the Michigan MFCU charged 39 complaints, obtained 25 convictions, and secured 16 civil settlements or judgments. The total recoveries related to these convictions and settlements were $46,562,341.

June 5, 2015

The District of Columbia reached a $19.4 million settlement resolving the District’s claims concerning multi-year contracts the DC Public Schools (DCPS) entered into with Chartwells, a division of Compass Group USA, Inc., and Thompson Hospitality Services LLC, in a case first filed by a whistleblower.
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