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Federal Jury Awards Walgreens Pharmacist $1.2 Million in Medicare Billing Fraud Case

A federal jury in California Aug. 19 awarded a fired Walgreens pharmacist more than $1.2 million—mostly in punitive damages—after finding that his complaints the pharmacy chain was engaged in fraudulent Medicare billing practices were a “motivating factor” in his termination (Mitri v. Walgreen Co. Inc., E.D. Cal., No. 1:10-cv-538-AWI-SKO, damage award 8/19/11).
The jury, in two separate phases, awarded Sami Mitri, who began working as a pharmacist for Walgreen Co. in the Fresno, Calif., area in 1996, past and future economic losses totaling $88,000, and punitive damages of $1.16 million.
The panel also answered affirmatively that his complaints regarding the billing practices constituted a motivating factor in the company’s decision to terminate him, and decided that Walgreens would not have fired Mitri if the company had not considered those billing fraud complaints.
The jury also found that the company’s conduct constituted “malice, oppression or fraud,” and that the conduct was committed by one or more officers, directors, or managing agents of the pharmacy chain.
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J&J Says Agreement Reached in Criminal Risperdal Promotion Case

Johnson & Johnson said in an Aug. 9 securities filing that it has reached an agreement with the government on resolving criminal charges related to the promotion of the antipsychotic drug Risperdal.
In a 10-Q filing with securities regulators, the company said that discussions “have been ongoing in an effort to resolve criminal penalties under the Food Drug and Cosmetic Act related to the promotion” of Risperdal (risperidone).
The company said an agreement in principle “on key issues relevant to a disposition of criminal charges pursuant to a single misdemeanor violation” of the food and drug law has been reached, but “certain issues remain open before a settlement can be finalized.”
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Connecticut Hospital Settles Charges of Overbilling Medicare for Prostate Drug

A Connecticut hospital said Aug. 10 it has entered into a civil settlement agreement with the federal government under which it will pay $516,527 to resolve allegations that it improperly charged Medicare for patient injections of the drug Lupron.
Federal prosecutors allege that St. Francis Hospital and Medical Center in Hartford improperly billed Medicare in violation of the False Claims Act for injections of leuprolide acetate, known by the brand name Lupron or Lupron Depot. The Department of Justice also announced the settlement Aug. 10.
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DOJ Intervenes in Suit Over Clinic’s Alleged Improper Billing for Sleep Disorder Tests

TAMPA, Fla.—The Department of Justice June 14 announced it has intervened in a whistleblower lawsuit alleging a Florida sleep clinic violated the False Claims Act by billing Medicare and TRICARE for tests performed by uncertified technicians
In an intervenor’s complaint filed in Tampa in U.S. District Court for the Middle District of Florida, the government named as defendants Bay Area Sleep Associates LLC, which operates as SomnoMedics LLC, and its owner, Edward Killmer Jr.
The defendants operate 10 sleep laboratories throughout central Florida, the complaint noted.
The qui tam case alleges the defendants violated the False Claims Act by hiring unlicensed technicians to perform sleep tests, knowing that Medicare reimbursement regulations required diagnostic testing services at independent diagnostic testing facilities such as SomnoMedics be performed by a technician licensed or certified by a state or national credentialing body, DOJ said in a statement.
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Prosecutors See Case Shift From Pharma To Devices, Park Doctrine Cases Coming

Prosecutors told a conference audience June 7 that U.S. enforcement trends show a shifting from pharmaceutical drugs to biologics, biotechnology, and medical devices and that the Food and Drug Administration and the Department of Justice are actively pursuing cases involving the individual liability of executives.
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Alleged Kickbacks for Using Medical Devices Set Stage for FCA Suit Against Manufacturer

Blackstone Medical Inc., the maker of devices used in spinal surgeries, is not entitled to dismissal of a former employee’s whistleblower suit alleging that kickbacks the company paid to doctors for using its products resulted in fraudulent Medicare claims in violation of the False Claims Act, the U.S. Court of Appeals for the First Circuit determined June 1 (United States ex rel. Hutcheson v. Blackstone Medical Inc., 1st Cir., No. 10-1505, 6/1/11).
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Maker of Epilepsy Drug Pleads Guilty In Off-Label Case, Resolves FCA Charges

The U.S. subsidiary of Belgian pharmaceutical manufacturer UCB SA has pleaded guilty to the off-label promotion of its epilepsy drug Keppra and will pay more than $34 million to resolve criminal and civil liability, the Department of Justice said June 9 (United States v. UCB Inc., D.D.C., No. 1:11-375-RMU, guilty plea 6/9/11).
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High Court Rules Data From FOIA Request Constitutes Public Disclosure Under False Claims Act

 In a ruling with implications for the health care industry, the U.S. Supreme Court May 16 ruled that information gathered through Freedom of Information Act (FOIA) requests constituted “public disclosures” and precluded recovery…

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Drugmaker Serono Agrees to Pay $44.3 Million to Settle Fraud Charges

Pharmaceutical manufacturer EMD Serono Inc. has agreed to pay $44.3 million to settle allegations it paid providers kickbacks to induce them to prescribe or promote its multiple sclerosis drug Rebif and that these payments resulted in the…

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SEC cool to corporate demands on whistleblowers

(Reuters) – U.S. securities regulators are resisting corporate America’s demands to force whistleblowers to report possible wrongdoing internally before they can be considered for compensation from regulators. The Securities and Exchange Commission’s whistleblower proposal, one of many rules required by the Dodd-Frank Wall Street overhaul law, would financially reward people who provide original substantive tips leading to enforcement actions that result in sanctions exceeding $1 million.

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