As we noted in our Top 10 False Claims Act Recoveries post, it was another big year of recoveries under the False Claims Act. ��As usual, the majority of recoveries occurred in cases involving healthcare fraud.

As the Department of Justice (DOJ) just reported in its annual roundup of False Claims Act successes, of the $2.9 billion the government and whistleblowers recovered this past fiscal year (ending September 30), more than $1.67 billion (58%) came from matters involving healthcare fraud. ��Since 1986, when the False Claims Act was amended to add stronger incentives and protections for whistleblowers, the aggregate percentage of cases involving healthcare fraud is even higher — 70% (or $54 billion of the roughly $78 billion in total recoveries over this period).

Unsurprisingly, four of this past year’s Top-10 healthcare fraud recoveries involved violations of the Anti-Kickback Statute, which prevents making or receiving any form of consideration to induce patient referrals.�� Going after healthcare kickbacks has been a perennial DOJ enforcement priority.�� So has taking action against health care providers, pharmaceutical companies and pharmacies that contributed to and exacerbated the opioid crisis.�� Two of the Top-10 listings involved opioid-related fraud.

Rounding out the Top-10 listing are cases involving Medicare Advantage (Risk Adjustment) fraud, another hotbed for DOJ enforcement, and a variety of classic healthcare fraud cases involving overbilling Medicare or billing Medicare for services not provided.�� Not included in the listing is the $150 million jury verdict last June against Johnson & Johnson subsidiary Janssen Products for illegally promoting and marketing its HIV/AIDS drugs Prezista and Intelence. ��The decision is on appeal and if upheld could result in total damages ultimately exceeding $1 billion.

As expected, all but three of the Top-10 recoveries were originated by whistleblowers under the qui tam provisions of the False Claims Act.�� This percentage of whistleblower-led recoveries is consistent with the dominant role whistleblowers have played since 1986 in enforcing the False Claims Act.�� Of the $78 billion the government has recovered over this period, roughly $55 billion (71%) has come from matters originated by whistleblowers. ��Whistleblowers received roughly $9.5 billion in awards during this period.

Finally, 91�Թ���is especially pleased to note that two of this past year’s Top-10 cases were originated by whistleblowers the firm represented — Independent Health (No. 6) and DaVita (No. 9).

With all that said, here is our Top-10 listing of False Claims Act healthcare recoveries in 2024 (by calendar year).

No. 1: Endo Health ($476M).�� On February 29, Endo Health Solutions, which is in bankruptcy, agreed to pay roughly $476 million to settle DOJ charges of violating the False Claims Act and the Federal Food, Drug and Cosmetic Act through its sales and marketing of the opioid drug Opana.�� Specifically, the company allegedly used a marketing scheme that targeted healthcare providers the company knew were “pill mill” prescribing Opana for non-medically accepted indications.�� In addition to the civil settlement, the company was hit with a criminal fine of roughly $1 billion and an additional $450 million in criminal forfeiture, representing the second-largest set of criminal penalties ever levied against a pharmaceutical company.

No. 2: Teva ($450M).�� On October 10, New Jersey-based Teva Pharmaceuticals agreed to pay $450 million to settle DOJ charges of violating the False Claims Act and Anti-Kickback Statute by (i) paying Medicare patient copays for its multiple sclerosis drug Copaxone to steer patients to the drug while raising its price, and (ii) conspiring with other generic drug makers to fix prices for certain generic drugs, including its widely-used cholesterol drug pravastatin.

No. 3: Rite Aid ($410M).�� On July 10, Rite Aid Corporation and 10 subsidiaries and affiliates to pay $7.5 million and up to roughly $402 million in unsecured claims in Rite Aid’s bankruptcy to settle DOJ and whistleblower charges of violating the False Claims Act and Controlled Substances Act by dispensing hundreds of thousands of prescriptions for controlled substances — including highly addictive oxycodone and fentanyl — that lacked a legitimate medical purpose and/or were not issued in the usual course of professional practice.�� The allegations originated in a whistleblower lawsuit filed by Rite Aid pharmacy employees Andrew White, Mark Rosenberg and Ann Wegelin, who collectively will receive a whistleblower award of 17% of the government’s total False Claims Act recovery.

No. 4: Rite Aid ($121M).�� On July 10, Rite Aid Corporation and certain subsidiaries to pay $101 million and up to $20 million in unsecured claims in Rite Aid’s bankruptcy to settle DOJ and whistleblower charges of failing to properly report to Medicare drug rebates it received from manufacturers, characterizing them instead as bona fide service fees.�� The allegations originated in a whistleblower lawsuit filed by former Rite Aid subsidiary employee��Glenn Rzeszutko who will receive an undisclosed whistleblower award from the proceeds of the government’s recovery.

No. 5: Walgreens ($107M).�� On September 13, Illinois-based Walgreens agreed to pay roughly $107 million to settle DOJ and whistleblower charges of violating the False Claims Act by billing Medicare/Medicaid for prescriptions it processed but that patients never picked up.�� The allegations originated in a whistleblower lawsuit filed by former Walgreens pharmacy manager Steven Turck who received a whistleblower award of roughly $15 million from the proceeds of the settlement.

No. 6: Independent Health ($98M).�� On December 29, Buffalo-based Independent Health agreed to pay up to $98 million to settle DOJ and whistleblower charges of violating the False Claims Act by submitting invalid diagnosis codes to increase the payments the company received from Medicare for its Medicare Advantage Plan enrollees. ��The allegations originated in a whistleblower lawsuit filed by Teresa Ross, a former employee of Group Health Cooperative (now Kaiser). ��91�Թ���represented Ms. Ross who will receive a whistleblower award of at least $8.2 million from the proceeds of the settlement.

No. 7: Oak Street ($60M).�� On September 18, Chicago-based Oak Street Health to pay $60 million to settle DOJ and whistleblower charges of violating the False Claims Act and Anti-Kickback statute by paying kickbacks to third-party insurance agents in exchange for recruiting seniors enrolled in or eligible for Medicare Advantage to Oak Street Health’s primary care clinics.�� The allegations originated in a whistleblower lawsuit filed by Joseph Stinson who received a whistleblower award of $9.9 million from the proceeds of the government’s recovery.

No. 8: QOL Medical ($47M).�� On November 15, Florida-based pharmaceutical company QOL Medical and its CEO Frederick Cooper agreed to pay $47 million to resolve DOJ and whistleblower charges they violated the False Claims Act and Anti-Kickback Statute by providing patients free breath testing services to induce them to purchase QOL’s drug Sucraid.�� The allegations originated in a whistleblower lawsuit filed by former QOL employees Elizabeth Allen, Lauren Canlas, Donald Johnson and Stacey Adams, who collectively received a whistleblower award of roughly $8 million from the proceeds of the government’s recovery.

No. 9: DaVita ($34.5M).�� On July 18, Denver-based DaVita Inc. agreed to pay roughly $34.5 million to settle DOJ and whistleblower charges of violating the False Claims Act and Anti-Kickback Statute by (i) paying kickbacks to a competitor for referrals to DaVita’s former pharmacy services subsidiary DaVita Rx, and (ii) paying kickbacks to nephrologists and vascular physicians for patient referrals to DaVita dialysis centers.�� The allegations originated in a whistleblower lawsuit filed by former Chief Operating Officer of DaVita Kidney Care Dennis Kogod.�� 91�Թ���represented Mr. Kogod, who received a whistleblower award of roughly $6.4 million from the proceeds of the government’s recovery.

No. 10: Silver Lake ($30.6M).�� On January 16, New Jersey-based Silver Lake Hospital and certain hospital investors agreed to pay $30.6 million to settle DOJ charges of violating the False Claims Act and Federal Debt Collection Procedures Act by claiming excessive cost outlier payments from Medicare for fraudulent money transfers by the hospital to investors. ��With respect to the cost outlier overpayments, which are designed to supplement Medicare payments for unusually high costs of care, the government alleged Silver Lake improperly distorted the cost outlier payment system by rapidly increasing its charges well in excess of any increase in its costs.

If you would like more information on any of these settlements or would like to learn more about what it means to be a whistleblower under the False Claims Act, please do not hesitate to contact us.�� We will connect you with an experienced member of our whistleblower team for a free and confidential consult.

Read Top 10 False Claims Act Recoveries in Healthcare for 2024 at constantinecannon.com

The Indiana-based Community Health Network (“Community”) an additional $135 million to resolve a False Claims Act case involving Stark Law violations initiated by a whistleblower 91�Թ���represented.

The $135 million settlement marks the final resolution of a 2014 False Claims Act case brought by whistleblower Thomas P. Fischer, former Community Chief Operating Officer and Chief Financial Officer. In December 2023, the United States and Community the first part of this case for $345 million—the largest Stark Law settlement to date.

The whistleblower alleged that Community their physicians salaries that were significantly higher than fair market value in exchange for referrals and submitted claims to Medicare for the referred services. This scheme included physicians employed by Community and the independent oncology group, Community Hospital Oncology Providers. Community allegedly offered these exorbitant payments to physicians to induce them to refer patients to Community’s facilities in violation of the Stark Law.

Fischer brought the case under the qui tam provisions of the False Claims Act, which allows private individuals to bring a lawsuit on behalf of the government and to share any recovery.

In 2015, Community paid $20.3 million to resolve a separate False Claims Act case alleging inflated Medicare and Medicaid billing for outpatient surgeries at ambulatory centers billed as hospital procedures.

Altogether over the last ten years, Community has paid over $500M to resolve False Claims Act cases.

The Fischer case is captioned��U.S. and State of Indiana ex rel Fischer v. Community Health Network, Inc., et al.,��Case No. 1:14-cv-1215-RLY-MKK.

The government counts on whistleblowers like Fischer to report fraud and other misconduct. We applaud Fischer for taking action with his courageous efforts.

If you would like to learn more about��health care fraud,���ٳ����False Claims Act,��what it means to be a whistleblower, or believe you have a case, please��contact��us.��We will connect you with an experienced member of our��whistleblower team.

Read Indiana’s Community Health Network To Pay an Additional $135M to Settle Stark Law Case Initiated by Whistleblower at constantinecannon.com

It was another big year of recoveries under the False Claims Act, the government’s primary enforcement tool to combat fraud.�� And as usual, whistleblowers paved the way by originating the bulk of the actions that led to these recoveries.

As the Department of Justice (DOJ) just reported in its annual roundup of False Claims Act successes, the government and whistleblowers recovered roughly $2.9 billion this past fiscal year (ending September 30) from 558 settlement and judgments.�� It is the second highest number of recoveries in the statute’s 160-year history.�� This brings the total amount of government recoveries under the statute to $78 billion since 1986 when the statute was significantly amended to increase the incentives and protections for whistleblowers.

Of the $2.9 billion in recoveries this past year, roughly $2.4 billion (83%) came from matters originated by whistleblowers.�� They received $400 million in whistleblower awards for their efforts, bringing the total tally of whistleblower awards to $9.5 billion since 1986.

Below is our Top-10 listing of False Claims Act recoveries in 2024 (by calendar year).�� Unsurprisingly, whistleblowers originated all but two of them.

No. 1: Endo Health ($476M).�� On February 29, Endo Health Solutions, which is in bankruptcy, agreed to pay roughly $476 million to settle DOJ charges of violating the False Claims Act and the Federal Food, Drug and Cosmetic Act through its sales and marketing of the opioid drug Opana.�� Specifically, the company allegedly used a marketing scheme that targeted healthcare providers the company knew were “pill mill” prescribing Opana for non-medically accepted indications.�� In addition to the civil settlement, the company was hit with a criminal fine of roughly $1 billion and an additional $450 million in criminal forfeiture, representing the second-largest set of criminal penalties ever levied against a pharmaceutical company.

No. 2: Teva ($450M).�� On October 10, New Jersey-based Teva Pharmaceuticals agreed to pay $450 million to settle DOJ charges of violating the False Claims Act and Anti-Kickback Statute by (i) paying Medicare patient copays for its multiple sclerosis drug Copaxone to steer patients to the drug while raising its price, and (ii) conspiring with other generic drug makers to fix prices for certain generic drugs, including its widely-used cholesterol drug pravastatin.

No. 3: Raytheon ($428M).�� On October 16, Raytheon Company, a subsidiary of Virginia-based defense contractor RTX agreed to pay roughly $950 million to settle DOJ and whistleblower charges of violating (i) the False Claims Act by inflating its pricing on certain defense contracts (including for the Patriot missile system), and (ii) the Foreign Corrupt 91�Թ��� Act by bribing a high-level official at the Qatar Emiri Air Force to secure Qatari military contracts.�� Raytheon paid $428 million to settle the False Claims Act portion of the settlement which represents the second largest government procurement fraud recovery under the statute.�� The allegations originated in a whistleblower lawsuit filed by former Raytheon employee Karen Atesoglu who will receive a whistleblower award of $4.2 million from the proceeds of the False Claims Act settlement.

No. 4: Rite Aid ($410M).�� On July 10, Rite Aid Corporation and 10 subsidiaries and affiliated to pay $7.5 million and up to roughly $402 million in unsecured claims in Rite Aid’s bankruptcy to settle DOJ and whistleblower charges of violating the False Claims Act and Controlled Substances Act by dispensing hundreds of thousands of prescriptions for controlled substances — including highly addictive oxycodone and fentanyl — that lacked a legitimate medical purpose and/or were not issued in the usual course of professional practice.�� The allegations originated in a whistleblower lawsuit filed by Rite Aid pharmacy employees Andrew White, Mark Rosenberg and Ann Wegelin, who will collectively receive a whistleblower award of 17% of the government’s total False Claims Act recovery.

No. 5: Rite Aid ($121M).�� On July 10, Rite Aid Corporation and certain subsidiaries to pay $101 million and up to $20 million in unsecured claims in Rite Aid’s bankruptcy to settle DOJ and whistleblower charges of failing to properly report to Medicare drug rebates it received from manufacturers, characterizing them instead as bona fide service fees.�� The allegations originated in a whistleblower lawsuit filed by former Rite Aid subsidiary employee Glenn Rzeszutko who will receive an undisclosed whistleblower award from the proceeds of the government’s recovery.

No. 6: Kabbage ($120M).�� On May 13, now-bankrupt financial technology company Kabbage Inc. (doing business as KServicing) agreed to pay up to $120 million in unsecured claims in the company’s bankruptcy to settle DOJ and whistleblower charges of violating the False Claims Act by improperly submitting thousands of claims for loan forgiveness, loan guarantees, and processing fees to the Small Business Administration under the COVID relief Payment Protection Program.�� The allegations originated in whistleblower lawsuits filed by a former analyst in Kabbage’s collections department and an accountant who submitted PPP loan applications to Kabbage and other lenders.�� They will receive an undisclosed whistleblower award��from the proceeds of the government’s recovery.

No. 7: Walgreens ($107M).�� On September 13, Illinois-based Walgreens agreed to pay roughly $107 million to settle DOJ and whistleblower charges of violating the False Claims Act by billing Medicare/Medicaid for prescriptions it processed but that patients never picked up.�� The allegations originated in a whistleblower lawsuit filed by former Walgreens pharmacy manager Steven Turck who will receive a whistleblower award of roughly $15 million from the proceeds of the settlement.

No. 8: Independent Health ($98M).�� On December 29, Buffalo-based Independent Health agreed to pay up to $98 million to settle DOJ and whistleblower charges of violating the False Claims Act by submitting invalid diagnosis codes to increase the payments the company received from Medicare for its Medicare Advantage Plan enrollees. ��The allegations originated in a whistleblower lawsuit filed by Teresa Ross, a former employee of Group Health Cooperative (now Kaiser). ��91�Թ���represented Ms. Ross who will receive a whistleblower award of at least $8.2 million from the proceeds of the settlement.

No. 9: Sikorsky/Derco ($70M).�� On June 21, Connecticut-based Sikorsky Support Services and its sister company Wisconsin-based Derco Aerospace agreed to pay $70 million to settle DOJ and whistleblower charges of violating the False Claims Act by overcharging the Navy for spare parts and materials needed to repair and maintain the primary aircraft used to train naval aviators.�� Specifically, the affiliate companies allegedly entered into an undisclosed subcontract which included an improper markup which Sikorsky passed on to the government.�� The allegations originated in a whistleblower lawsuit filed by former Derco employee Mary Patzer who will receive an undisclosed whistleblower award from the proceeds of the government’s recovery.

No. 10: Gen Digital ($55M).�� On December 2, Gen Digital Inc. (formerly known as Symantec Corp.) agreed to pay roughly $55 million to satisfy a judgment it violated the False Claims Act by mispresenting its commercial sales practices during the negotiation and performance of a General Services Administration contract. ��The allegations originated in a whistleblower lawsuit brought by Lori Morsell, who administered the contract at issue for Symantec, and will receive an undisclosed whistleblower award from the proceeds of the government’s recovery.

If you would like more information on any of these settlements or would like to learn more about what it means to be a whistleblower under the False Claims Act, please do not hesitate to contact us.�� We will connect you with an experienced member of our whistleblower team for a free and confidential consult.�� Maybe you will be the whistleblower who originates one of the next big Top-10 recoveries.

Read Top 10 False Claims Act Recoveries for 2024 at constantinecannon.com

The Department of Justice (DOJ) just released its False Claims Act for the fiscal year ending September 30, 2024.�� By all accounts, it has been another banner year for whistleblowers and the government in their efforts to combat fraud and recover pilfered taxpayer dollars.

First, the overarching numbers for the year:

• • The government and whistleblowers recovered roughly $2.9 billion in False Claims Act settlements and judgments. This does not include the additional $850 million the government recovered from two settlements just over the wire in October. One was with for $425 million; the other with for $428 million.

• • The government and whistleblowers were party to 558 False Claims Act settlements and judgments. It is the second highest number of recoveries, just shy of last year’s record number of 566 recoveries.

• • Whistleblowers filed 979 False Claims Act suits (under the statute’s qui tam provisions). It is the largest number of qui tam suits ever filed in a single year.

• • Of the roughly $2.9 billion in recoveries, approximately $2.4 billion (83%) came from matters originated by whistleblowers. This is consistent with the dominant role whistleblowers have played in recent years in originating False Claims Act lawsuits. In fact, since 1986 when Congress significantly increased their incentives and protections, whistleblowers have originated the majority of False Claims Act lawsuits.

• • Whistleblower received roughly $400 million in awards.

• • Of the roughly $2.9 billion in recoveries, more than $1.67 billion (58%) came from matters involving healthcare fraud. This does not include the additional amounts the government recovered in these actions for state Medicaid programs. Typically, healthcare fraud recoveries comprise an even higher proportion of total False Claims Act recoveries.

• • The total amount of False Claims Act recoveries since 1986 is roughly $78 billion with roughly $55 billion (71%) coming from matters originated by whistleblowers. Whistleblowers received roughly $9.5 billion in awards during this period.

Second, the primary areas of fraud enforcement the DOJ highlighted:

Healthcare Fraud.�� DOJ highlighted four key healthcare-related enforcement areas: (i) health care providers, pharmaceutical companies and pharmacies that contributed to and exacerbated the opioid crisis; (ii) providers billing Medicare/Medicaid and other government healthcare programs for medically unnecessary services or substandard care; (iii) fraud in the Medicare Advantage (or Medicare Part C) program, which DOJ characterized as an area of “critical importance” because it now represents the largest component of Medicare in terms of federal dollars spent and number of beneficiaries impacted; and (iv) DOJ’s perennial favorite, illegal kickbacks, which DOJ stressed “undermine the integrity of federal health care programs by tainting medical decision-making, increasing health care costs, and adversely affecting competition.”

Military Procurement Fraud. ��Next to healthcare-related fraud, government contracting fraud typically accounts for the second-largest area of False Claims Act enforcement.�� And within that area, fraud in connection with military supply contracts is common.�� DOJ is especially committed to enforcing this area of government procurement because “fraud in these programs not only squanders government funds, but also can deprive servicemembers of critical resources and potentially put them at risk.”

Pandemic Fraud.�� Fraud in connection with the trillions of dollars the government doled out in response to the COVID-19 crisis continues to be a top DOJ priority.�� Last year, DOJ secured more than 250 False Claims Act settlements and judgments in this area.�� They largely related to improper payments under the Paycheck Protection Program and Medicare fraud connected to COVID-19 testing and treatment.�� ��

Cybersecurity.�� DOJ continues to take very seriously the threats associated with cybersecurity failures.�� It is what prompted the agency’s creation of the several years ago to use the False Claims Act “to promote cybersecurity compliance by government contractors and grantees by holding them accountable when they knowingly violate applicable cybersecurity requirements.”

Third, the major takeaway from DOJ’s 2024 roundup: the False Claims Act remains the government’s primary fraud-fighting tool with whistleblowers continuing to play a primary role in the government’s fraud enforcement scheme.�� DOJ’s $2.9 billion in fraud recoveries was not the biggest annual haul by any stretch.�� DOJ’s show there have been much bigger years in the past.

But this past year’s tally was the largest in the past three years.�� More importantly, it was the largest ever in number of cases filed, meaning we can expect much bigger years down the road when these actions reach resolution.�� In terms of the 979 qui tam cases filed, there has not been another year even close, again reinforcing the prominent role whistleblowers play in enforcing the False Claims Act.�� It is a point DOJ Civil Chief Brian Boynton went out of his way to promote in DOJ’s report:

“Whistleblowers play a critical role in identifying fraud schemes.�� We continue to be grateful for their efforts and often substantial sacrifices to uncover and report these schemes.”

So if you think you might have information relating to healthcare fraud, procurement fraud, COVID-19 fraud, cybersecurity fraud, or any other fraud against the government and want to learn more about what it means to be a whistleblower under the False Claims Act, please do not hesitate to contact us.�� We will connect you with an experienced member of the 91�Թ���whistleblower team for a free and confidential consult.�� Who knows, you may have the case that will contribute to DOJ’s next great False Claims Act recovery.

Read DOJ’s False Claims Act Roundup for FY 2024 — Another Banner Year for the Government and Whistleblowers at constantinecannon.com

Athira Pharma Inc., a Bothwell, Washington-based, clinical stage bio-pharmaceutical company, will pay $4,068,698 to allegations that it violated the False Claims Act. It failed to report claims of research misconduct to the National Institutes of Health (NIH) and Department of Health and Human Services (HHS) Office of Research Integrity when filling out grant applications and grant award progress reports.

From January 1, 2016, to June 20, 2021, it was alleged that Athira failed to report allegations regarding its former CEO, Leen Kawas, for falsification and manipulation of scientific images in her doctoral dissertation, and in published research papers that were referenced in grant applications submitted to NIH, including in a 2019 NIH-funded grant.

Athira violated its regulatory obligations to disclose allegations to NIH in Research Progress Performance Reports, grant applications, and to the HHS Office of Research Integrity in Small Business Organization Statements, Institutional Assurances, or Annual Reports on Possible Research Misconduct.

Federally funded research is crucial to all Americans who desire accurate and reliable medical research to make advancements in science that impact our families and friends. Here, grant research for Alzheimer’s and Parkinson’s disease was implicated. Special Agent in Charge Steven J. Ryan of the HHS Office of Inspector General (OIG) commented: “The failure of Athira to properly disclose allegations of falsified and manipulated scientific images by its former CEO to the NIH undermines public trust in taxpayer-funded research.”

This civil settlement resolves claims brought by courageous whistleblower Andrew P. Mallon Ph.D.��under the qui tam provisions of the False Claims Act, in which a person can file an action on behalf of the United States and receive a sizeable portion of the recovery. With this settlement, Mallon will receive $203,434. To its credit, in this case, Athira did also notify NIH after the full board of directors learned of the research misconduct.

Whistleblowers are one of our first lines of defense to ensure the proper stewardship of grant funds, Brook Hargrave, an Auditor in the Division of Program Integrity at NIH.

If you think you might have information relating to potential fraud against the government, please contact��Constantine Cannon.��We will connect you with an experienced member of our whistleblower��team��for a free and confidential consult.

Read Scientific Research Misconduct: Athira Pharma Inc. Will Pay $4M to Settle False Claims Act Allegations at constantinecannon.com

In January 2025, the government that lab marketers, physicians and their associated entities have agreed to pay $1,137,914 to resolve False Claims Act allegations that they participated in laboratory kickback schemes in violation of the Anti-Kickback Statute.

The parties involved include physicians Dr. Abbesalom Ghermay (from Plano, Texas); Dr. Daniel Theesfeld (from Longview, Texas) and his medical practice H8 Pain Management Center of Texas PLLC; Dr. James Cook (from Richmond, Virginia) and his medical practice Family Medical Centers, P.C.; and owner of Advantage Medical Group, Troy Belton (from Columbia, South Carolina). The laboratory marketers are Shahram Naghshbandi, (from Fort Worth, Texas) and John Bello (from Chesterfield, Virginia) with his marketing company,��RiteRx4U LLC.

The settlements address claims that the laboratory marketers and their companies provided or conspired to provide kickbacks to doctors, while doctors and their companies accepted these kickbacks in exchange for laboratory referrals. These alleged kickbacks led to the submission of false or fraudulent laboratory testing claims to Medicare, violating the False Claims Act.

Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division said: “Monetary inducements to healthcare providers undermine the integrity of taxpayer-funded healthcare programs and can improperly influence healthcare providers’ decision-making. We will continue to hold accountable individuals, as well as companies, who disregard their legal obligations and participate in illegal kickback schemes.”

The Anti-Kickback Statute forbids paying, offering, receiving, or soliciting any form of payments or compensation to influence referrals for items and services covered by Medicare, Medicaid, and other federally funded healthcare programs. Its purpose is to safeguard the integrity of medical decision-making, ensuring that healthcare providers make decisions based on the best interests of their patients, free from improper financial influence.

The government has recovered more than $53 million in connection with management service organization (MSO) kickbacks to healthcare providers, including False Claims Act settlements with 48 physicians. This effort highlights the government’s strong focus on addressing healthcare fraud, including through the False Claims Act.

Whistleblowers play critical roles in reporting healthcare fraud and other misconduct. If you think you might have a case, or would like to learn��what it means to be a whistleblower, please contact��us.��We will connect you with an experienced member of our��whistleblower team.

Read Healthcare Providers and Marketers Will Pay $1.1M to Settle Laboratory Kickback Allegations at constantinecannon.com

On December 29, 2024, the government that Buffalo, New York’s Independent Health Association and Independent Health Corporation (collectively known as Independent Health) have agreed to pay up to $98 million to settle allegations that they violated the False Claims Act by submitting, or causing the submission of, invalid diagnosis codes to Medicare for Medicare Advantage Plan enrollees. 91�Թ���represented the brave whistleblower who came forward to uncover this scheme.

Under Medicare Advantage, beneficiaries can enroll in private managed care plans (“MA Plans”), which receive fixed payments from Medicare to provide covered benefits. These payments are adjusted based on the beneficiary’s health status. Beneficiaries with more complex or expensive diagnoses receive higher “risk adjustment” scores which result in increased payments to the MA Plan to cover expected health care costs.

Independent Health manages MA plans for beneficiaries living in western New York. The government alleges that Independent Health developed a wholly owned subsidiary called DxID LLC to dig deep when searching medical records and asking physicians for information to support extra diagnoses that could result in higher risk scores. DxID completed these services for Independent Health and other MA Plans.

In a previous complaint, the United States alleged that Independent Health, with assistance from DxID, and its founder / chief executive, Betsy Gaffney, submitted fraudulent diagnoses to CMS, not supported by the beneficiaries’ medical records, to inflate Medicare’s payments to Independent Health from 2011 to 2017.

The December 2024 settlement amount is based on Independent Health’s ability to pay. As listed in the��, Independent Health is guaranteed to pay $34,500,000 and will make contingent payments of up to $63,500,000 for itself and DxID. DxID halted its operations in 2021. Gaffney will independently pay $2,000,000.

Deputy Assistant Attorney General Michael Granston of the Justice Department’s Civil Division stated: “The government expects those who participate in Medicare Advantage to provide accurate information to ensure that proper payments are made for the care received by enrolled beneficiaries…Today’s result sends a clear message to the Medicare Advantage community that the United States will take appropriate action against those who knowingly submit inflated claims for reimbursement.”

This case is captioned United States ex rel. Ross v. Independent Health Association et al., No. 12-CV-0299(S) (WDNY). The civil settlement includes a resolution of claims brought under the��qui tam��or whistleblower provisions of the False Claims Act by Teresa Ross, a former employee of Group Health Cooperative, now Kaiser Foundation Health Plan of Washington (Kaiser). Under the��qui tam��provisions, a private party can file an action on behalf of the United States and receive a portion of the recovery. The Act allows the government to intervene in such lawsuits, as seen with this case.

Ross will receive at least $8,212,500 from the settlement announced on December 20, 2024. Ross also alleged that Kaiser used DxID to discover additional diagnoses to pad Medicare submissions for risk adjustments. The United States previously��settled��those claims with Kaiser.

The government counts on whistleblowers like Ross to recover billions of dollars lost to healthcare fraud each year.

If you would like to learn more information on���ٳ����False Claims Act, what it means to be a whistleblower, or believe you have a case, please��contact��us.��We will connect you with an experienced member of our��whistleblower team.

Read Independent Health to Pay $98M to Resolve Medicare Advantage Fraud Allegations at constantinecannon.com

Booz Allen closed out 2024 by agreeing to pay $15,875,000 to allegations that one of its subsidiaries, Booz Allen Hamilton Engineering Services LLC (BES), violated the False Claims Act by engaging misconduct in connection with the government’s procurement process.

The FCA centered around BES claims for payment related to a “General Service Administration (GSA) task order to supply computer military training simulators and systems to Department of Defense (DoD) agencies, including the Air Force.”�� The government two BES employees (John Hancock and Karen Paulsen) “engaged in a fraudulent course of conduct” with an Air Force contracting official (Keith Seguin) and with a manager of BES subcontractor QuantaDyn Corp. (David Bolduc Jr.), resulting in GSA awarding BES a task order and BES awarding task order modules to subcontractor QuantaDyn on sole-source basis.

In particular, as to BES employees Hancock and Paulsen influencing GSA to award the task order to BES, the government that Air Force contracting official Seguin “improperly and illegally divulged confidential government contracting and budget information, a competitor’s confidential bid or proposal information, and source selection information to Hancock and Paulsen,” who then “used the illicit information to prepare the GSA offer evaluation forms” for BES and for BES’s only competitor.

The government further that after GSA awarded the task order to BES, BES employees Hancock and Paulsen, Air Force contracting official Seguin, and QuantaDyn manager Bolduc used “confidential government budget information to formulate and submit price quotes to GSA for the individual modules that BES sole-sourced to QuantaDyn,” resulting in 37 task order modules BES awarded to QuantaDyn on a sole-source basis.

In addition to this civil settlement, the DOJ also that “Hancock, Paulsen, Seguin and Bolduc previously resolved criminal charges related to this conduct.”

This is the latest in a long line of False Claims Act cases and settlements relating to the government procurement process.�� Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division remarked: “Government contractors that improperly receive confidential government information during the procurement process corrupt the integrity of that process. This settlement demonstrates our continuing commitment to protecting the integrity of the government’s procurement process.”�� Indeed, the DOJ established the to root out antitrust violations and related schemes in the government procurement process.

This is not Booz Allen’s only recent FCA settlement.�� In 2023, Booz Allen agreed to pay the United States $377 million��to settle charges that it billed the government for costs unrelated to its government contracts.

If you have any information about��government contract or procurement fraud, or would like to learn��what it means to be a whistleblower, please don’t hesitate to��contact��us.��We will connect you with an experienced member of our��whistleblower team.

Read Booz Allen Pays $15.875M to Settle False Claims Act, Procurement Allegations at constantinecannon.com

On January 3, Johnny Buscema Jr. from New Port Richey, Florida, and his companies, S.A.F.E. Structure Designs (in Las Vegas) and U.S.A. Manufacturing (in New Port Richey) to pay $1,000,000 to resolve allegations that they engaged in bid rigging in violation of the False Claims Act. According to the government, Buscema and his companies caused a prime vendor for the Defense Logistics Agency (DLA) to submit false contract bids to the DLA. This resulted in overcharging Department of Defense (DoD) customers for goods and services bought during those contracts. The settlement’s total considers the parties’ ability to pay.

S.A.F.E. Structure Designs sells safety equipment to government customers. U.S.A Manufacturing is a general construction company. The companies offer third party logistics support for receiving, transportation, warehousing, product acquisition, shipping, and returns to military customers. This is conducted through DLA contracts for Maintenance, Repair and Operations (MRO) in America’s Northeast and Southeast regions.

MRO contracts included in the settlement are held by a prime vendor that acquires supplies and equipment for DoD agencies, including chemicals, electrical supplies, hardware, HVAC/refrigeration, prefabricated structures, and small tools. The MRO program’s goal is to achieve satisfactory product pricing via leveraged buying, inventory cost reductions, and infrastructure savings. To gain the best price when acquiring items for the government, MRO contracts require the prime vendor to participate in competitive bidding, asking for bids from two independently competing vendors for transactions under $25,000, and three independently competing vendors for transactions at or above $25,000.

From 2016 to 2023, the government alleges that the settling parties and other entities conspired to rig bids on the MRO contracts in the Northeast and Southeast regions of the United States. Buscema also purportedly submitted non-competitive bids, paid other vendors to submit non-competitive bids, and submitted multiple bids from his two companies on the same solicitations. This would help the prime vendor meet the requirement of gaining bids from two or three vendors and make one bid appear more competitive. The government claims it was overcharged for items purchased under the MRO contracts.

Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division said: “Those who seek to do business with the government are expected to compete fairly and independently to ensure that the government receives an appropriate price. The department will hold accountable government contractors that engage in bid rigging or otherwise seek to defraud the American taxpayers.”

U.S. Attorney Joshua S. Levy for the District of Massachusetts commented, “They manipulated and undermined the fair and open bidding process designed to save our military��—��and taxpayers��— money. Contractors should be scrupulous in dealing with the government, not coordinating with each other to pad their bottom line. When defense contractors collude, rather than compete, they violate the law and the public’s trust.”

If you believe you have information about potential fraud against the government, please do not hesitate to��contact��us.��We will connect you with an experienced member of the 91�Թ���whistleblower��team��for a free and confidential consult.

Read Johnny B. Fraud: Government Contractor Will Pay $1M to Resolve False Claims Act Allegations for Submitting Fraudulent Bids on Contracts at constantinecannon.com

While many of us are enjoying the slowdown typically accompanying the holiday season, the Department of Justice (DOJ) has been hard at work with a flood of False Claims Act successes to usher in the New Year.�� In the last two weeks alone, DOJ has secured roughly a dozen such settlements, returning roughly $165 million to the government’s coffers.

The False Claims Act is the government’s primary fraud-fighting tool through which the government annually recovers billions of dollars of ill-gotten gains. ��It was enacted during the Civil War to go after war profiteers trying to defraud the Union Army with lame mules, empty munitions, and the like.

While the statute reaches virtually any type of fraud against the government, most of the False Claims Act cases DOJ brings involve healthcare fraud, and more specifically, fraud against Medicare/Medicaid and the other government healthcare programs.�� Indeed, all but three of DOJ’s most recent spate of settlements involve healthcare fraud.�� And notably, four of them involved violations of the Anti-Kickback Statute, a perennial DOJ enforcement priority, which prohibits paying or receiving any form of consideration to induce patient referrals.

Here is a breakdown of these recent settlements:

• December 26 — SoCal Medical Center ($10M). Southern California Medical Center (SCMC), Universal Diagnostic Laboratories, and their owners agreed to pay $10 million to settle DOJ and whistleblower charges of violating the False Claims Act, Anti-Kickback Statute, and Stark Law by paying kickbacks and making self-referrals. ��According to the government, the defendants (i) paid marketers to refer Medicare/Medi-Cal patients to SCMC clinics, (ii) paid third-party clinics through above-market rent payments, complimentary and discounted services to clinic staff, and write-offs of balances owed by patients and clinic staff in exchange for referring Medicare/Medi-Cal patients to UDL for lab tests, and (iii) referred Medicare/Medi-Cal patients from SCMC clinics to UDL for lab tests.

• December 23 — MMM Holdings ($15M). The Puerto Rico-based healthcare provider agreed to pay roughly $15.2 million to DOJ charges of violating the False Claims Act and Anti-Kickback Statute through gift card incentive program.�� According to the government, MMM distributed gift cards to administrative assistants of providers to facilitate the enrollment of thousands of Medicare beneficiaries in an MMM Medicare Advantage plan.

• December 23 — Food City ($8.5M). The Virginia-based grocery store chain agreed to pay roughly $8.5 million to DOJ and whistleblower charges of violating the False Claims Act by dispensing through its pharmacies opioids and other controlled substances covered by Medicare/Medicaid that were medically unnecessary and/or without a valid prescription.

• December 23 — Inform Diagnostics ($2.9M). The Texas-based clinical laboratory agreed to pay $2.9 million to DOJ charges of violating the False Claims Act and Anti-Kickback Statute through its purchased test arrangements (PTAs) with several physician practice customers. ��According to the government, Inform Diagnostics used these PTA agreements to induce its physician customers to refer their patients for certain diagnostic services Inform Diagnostics billed to Medicare.

• December 23 — BTW Solutions ($1.5M). The Arkansas-based drug wholesaler for physicians treating workers’ compensation patients agreed to pay $1.5 million to DOJ and whistleblower charges of violating the False Claims Act and Anti-Kickback Statute for improperly billing the Department of Labor’s Workers’ Compensation Programs for certain pain creams.�� According to the government, BTW induced the sale of its pain creams to physicians by offering them at or near cost, billing the government on behalf of the physicians at an exorbitant markup and then splitting the reimbursement with the physicians.

• December 20 — Independent Health ($98M). The Buffalo-based healthcare provider agreed to pay up to $98 million to DOJ and whistleblower charges of violating the False Claims Act by billing Medicare based on invalid diagnosis codes for its Medicare Advantage Plan patients.�� According to the government, Independent Health created a wholly owned subsidiary (called DxID) to retrospectively search medical records to support additional diagnoses to generate higher risk scores, with the ultimate goal of inflating Medicare’s payments to Independent Health.

• December 20 — Cardiology 91�Թ��� ($17.8M). Sixteen separate cardiology practices across 12 states agreed to pay roughly $17.8 million to settle DOJ and whistleblower charges of violating the False Claims Act by overbilling Medicare for diagnostic radiopharmaceuticals used to treat certain cancers and diseases. ��According to the government, the settling cardiology practices regularly reported inflated acquisition costs to Medicare to increase their reimbursement payments.

• December 20 — Rapid Health ($8.2M). The Los Angeles-based pharmacy agreed to pay roughly $8.2 million to DOJ charges of violating the False Claims Act by billing Medicare for Covid-19 tests never provided.�� According to the government, Rapid Health’s processing procedures caused the company to bill Medicare for Covid tests without shipping them to the beneficiary and Rapid Health was aware of the issues but continued to bill Medicare anyway.

• December 19 — Chemonics International ($3.1M). The Washington, DC based international development firm agreed to pay roughly $3.1 million to DOJ charges of violating the False Claims Act by submitting fraudulent claims for payment to the U.S. Agency for International Development (USAID). ��According to the government, Chemonics (i) acted recklessly in failing to detect fraudulent charges by its subcontractor, Zenith Carex, for certain delivery services in Nigeria, and (ii) passed those inflated charges on to USAID under its Global Health Supply Chain-Procurement and Supply Chain Management contract. ��The government claimed Chemonics allowed these overcharges for more than two years because of inadequate financial controls, monitoring, and employee training and support.

• December 18 — Lafayette RE Management ($680K). The New York City based private asset manager agreed to pay $680,000 to DOJ and whistleblower charges of violating the False Claims Act by securing improper loans under the COVID-19 Paycheck Protection Program (PPP).�� According to the government, the company improperly obtained a PPP loan by falsely certifying it was economically necessary due to the uncertainty caused by the pandemic.

• December 16 — Revision Military ($426K). The Vermont-based manufacturer of protective eyewear systems agreed to pay $426,000 to DOJ charges of violating the False Claims Act by selling eyewear products it falsely represented were wholly sourced in the United States.�� The Berry Amendment requires textile components in products sold to the military be sourced from the United States.�� According to the government, however, the company used a non-domestic source of carrying pouches, cases, and/or straps for certain eyewear systems it sold to the military.

Also notable is that whistleblowers initiated roughly half these actions under the qui tam provisions of the False Claims Act, which allow private parties to bring False Claims Act lawsuits on behalf of the government and share in any government recovery.�� Over the past thirty years, whistleblowers have been responsible for originating a majority of False Claims Act cases and have received billions of dollars in whistleblower rewards.

So if you think you might have information relating to potential fraud against the government, please do not hesitate to contact us.�� We will connect you with an experienced member of the 91�Թ���whistleblower team for a free and confidential consult.

Read DOJ Ends 2024 with a Flood of False Claims Act Successes at constantinecannon.com