Tuesday, May 31, 2011

Good briefing that explains off-label marketing--from the defense

Click here for a good briefing on off-label marketing (click on the link to open up the PowerPoint presentation).

FDA targeting Pharma execs

Forty-year-old rats are rampaging through the pharmaceutical industry. Frustrated by its lack of success at reining in drug-company abuses, FDA is bringing back a legal doctrine spawned by long-dead rodents to bring criminal charges against pharmaceutical executives, including executives who had no personal knowledge of company misdeeds.  "It is clear that fines are not working here," said Eric Blumberg, FDA deputy chief counsel for litigation, last November. "We need to put something else on the scale to make people think twice, three times." Blumberg was talking about illegal drug marketing. In 2009 Eli Lilly paid $1.4 billion for crossing the line in marketing Zyprexa (olanzapine) and Pfizer paid $2.3 billion for illegal marketing of Bextra (valdecoxib).

Understanding off-label whistleblower cases


Factual vs. Legal False Claims--a recent decision

A District Court in the Eastern District of Texas recently denied a motion to dismiss brought by DaVita, Inc.  The Court expressly distinguishes between overfill utilization and overfill billing.  The Court concluded that the Government's general awareness of the former practice by some dialysis providers did not condone or excuse participation in the latter, illegal practice which includes billing for costs not incurred (see pages 12-18).  The Court addressed the issue of what is a factually false claim compared with a legally false claim. 

Click here for the District Court's memorandum.

Friday, May 27, 2011

Soldiers of qui tam fortune

Many of you have asked for the law review article I wrote about whether service members have standing to prosecute qui tam actions.  Here it is:
34 Pub Cont. LJ 45 (Hargrove)

CHS subpoenaed by SEC and HHS, sued by shareholders

FierceHealthCare is reporting "Franklin, Tenn.-based Community Health Services (NYSE: CYH) has been hit with subpoenas from the SEC and HHS Office of Inspector General in Houston, and just learned of two class-action lawsuits against it in Tennessee, according to notifications it filed with the SEC yesterday."

Finally--the SEC has issued its whistleblower regs

Below is a fact sheet and further below are the regs. 
Sec Whistle Blower Rules


Thursday, May 26, 2011

Ever wonder why the ACLU doesn't like the seal provision of the False Claims Act

Read why the ACLU wants to obliterate the FCA's seal provision:
Aclu Motion Fca

Supreme Court: a FOIA request creates a public disclosure bar

Lesson #1 one for all of you relator wannabes: don't FOIA!  To see why, read the S.Ct. decision below.  Click here for an analysis by the lawyers over at FCAalert.com.


A good interview of Professor Malcom Sparrow

I've blogged about Professor Malcom Sparrow.  Click here for a recent interview of him.  Click here for my previous posts about Prof. Sparrow. 

Wednesday, May 25, 2011

FDA issues draft guidance on financial disclosures for investigators and drugmakers

The FDA has just issued a draft guidance on financial conflicts of interest for clinical investigators and the drugmakers that enlist their assistance. The document is designed to revise a 10-year set of rules and address an issue that has grown increasingly contentious in recent years.  “During the intervening years, interest has grown in the public disclosure of industry financial arrangements with physicians,” the agency writes. The “FDA is striving to achieve a proper balance between transparency and the right to privacy of clinical investigators with respect to their financial arrangements as expressed in the agency’s protection of privacy regulation.”
If you have something to say, then you should submit a comment to the FDA.

Here is the FDA draft guidance:
FDA: Financial Disclosure by Clinical Investigators (Draft Guidance)

Using rehab to committ health care fraud

From my cases, I've noticed there is a greater amount of fraud with vulnerable patient populations (e.g., elderly, poor, immigrant) compared with populations which are in relatively decent condition.   This story by Dr. Stefan Kruszewski, M.D., bears out my experience.  Below is an excerpt.  Click here for the full story.
In my specialty as an addiction  psychiatrist, I have often advocated for residential treatment when unremitting drug and alcohol problems persist because other, less intensive, services have failed. That may soon change.  Over the past two years, I’ve witnessed a worrisome trend: the medicalization of addictions. Some of this makes no sense to me. Let me explain . . . .

Tuesday, May 24, 2011

Another Texas dentist found guilty of committing medicaid dental fraud

The Abilene Reporter-News is reporting that after "a two-week-long trial before U.S. District Judge Sam R. Cummings, a jury has found James Crow, a dentist from Brownwood, guilty on 17 of the 20 counts of a superseding indictment charging offenses related to a health care fraud scheme he ran, announced U.S. Attorney James T. Jacks of the Northern District of Texas.  The U.S. attorney's office stated that the jury convicted Crow, 67, on two counts of making false statements involving a health care matter and 15 counts of health care fraud."

Below are the: 1) Indictment; 2) Jury Charge (note the questions from the jury--interesting); and 3) the Verdict (bad day for Dr. Crow--hope he enjoyed those Harley Davidson motorcycles paid for by your tax dollars--the Government is seeking to seize his assets and it looks like Dr. Crow had a thing for Harleys).  

Click here for the Government's witness list and here for the Government's exhibit list.  

Congratulations to the AUSAs and the investigators.  A review of the case file reveals Dr. Crow put up a vigorous defense.   Of course it appears he had a lucrative dental practice funded by the taxpayers. 
U.S. James Crow (Superseding Indictment)
U.S. v. James Crow (Jury Charge)

U.S. v. James Crow (Verdict)

Antipsychotic usage and kids in custody--an American tragedy

By Pharmalot:
In the latest example of who antipsychotics are being prescribed inappropriately, Florida’s state-run jails and residential homes are regularly giving large doses of the meds but not for uses that were approved by the FDA. And in some cases, the drugs are prescribed by contract doctors who have taken speaking fees and other gifts from drugmakers, according to The Palm Beach Post.
Click here for the full story.

More on the Quest settlement

Here is an LA Times story on the Quest settlement.

Here is a Bloomberg story.

Quest is a repeat fraudster.  Click here and here.

Quest Diagnostics In Deal To Pay $241 Million . . . another repeat player

Quest Diagnostics is one of seven private medical labs being sued by the state of California for costing the state hundreds of millions of dollars by overcharging Medi-Cal by as much as 400 percent. The whistleblower in this case is Chris Riedel, CEO of Hunter Laboratories, who refused to join in the price-gouging practices. The seven defendants are: Quest Diagnostics; Health Line Clinical Labs; Westcliff Medical Labs; Physicians Immunodiagnostic Laboratory; Whitefield Medical Laboratory; Seacliff Diagnostics Medical Group, and; Laboratory Corporation of America.

Quest Diagnostics is a repeat player, having previously paid $302 million to settle federal civil and criminal charges related to a Quest subsidiary which sold a parathyroid hormone immunoassay test which reported elevated results.  Quest then had to pay an additional $12.5 million to settle state claims concerning the accuracy of diagnostic tests. 

Here is the qui tam complaint:
CA v. Quest Complaint

Monday, May 23, 2011

5 Stanford med school faculty members disciplined for ties to drugmakers

Pharmalot posts "Stanford University has disciplined five faculty members at its medical school for violating school policy by giving paid promotional speeches for drugmakers, according to ProPublica,"  Click here for the full story. 

Click here and here for a related stories.  Click here about attempts at reform.

Major Davis too busy to be sentenced -- hearing reset to June 1, 2011

I've blogged about the criminal case of U.S. Army Major Jason L. Davis.  (Click here.)  It looks like Major Davis was too busy to be sentenced on May 18, so the Court reset the hearing.  See Court entry below.
03/17/201111 NOTICE OF RESCHEDULED HEARING as to Jason Layne Davis (cc: USPO, PTS, USMO) Sentencing reset from 5/18/2011 to 6/1/2011 at 10:00 AM in D Courtroom before Judge J Richard Creatura per defendant's schedule conflict. (KAM) (Entered: 03/17/2011)

Below is a character reference letter (filed with the court) from Major Davis' supervisor.  With supervisors like this, no wonder the Army washed its hands of court-martialing Major Davis. 
Davis - Character Letter

Friday, May 20, 2011

Brooklyn Physical Therapist Pleads Guilty to Fraud Scheme Involving False Billings to Medicare

From the DoJ: "Brooklyn physical therapist pleaded guilty today for his role in submitting false and fraudulent claims to Medicare for physical therapy services that were medically unnecessary and never provided, announced the Departments of Justice and Health and Human Services (HHS)."

Thursday, May 19, 2011

The winds of health care reform change are a blowin'

Click here and here for reports about how the current regulatory environment is causing major change in the health care industry. 

Wednesday, May 18, 2011

Serono to pay $44.3 million for its marketing of Rebif

Pharmaceutical manufacturers Serono Laboratories, Inc., EMD Serono, Inc., Merck Serono S.A., and Ares Trading S.A., have agreed to pay $44.3 million to resolve False Claims Act allegations in connection with the marketing of the drug Rebif.  Click here for the story.  Click here for the DoJ press release.

Tuesday, May 17, 2011

Another Army Major pleads guilty to bribery

As a military officer, these cases really disappoint me.  Almost all the officers I've worked with are the best America has to offer.  But there seems to be a small cadre of Army officers who are corrupt.      

Here is an excerpt from the DoJ press release.   
A retired major in the U.S. Army pleaded guilty today in San Antonio to accepting $400,000 from a contractor following his deployment to Kuwait, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.  Charles Joseph Bowie Jr., 45, of Georgetown, Texas, pleaded guilty today before U.S. Magistrate Judge Nancy Stein Nowak in the Western District of Texas to a criminal information charging him with one count of engaging in monetary transactions in property derived from specified unlawful activity.  According to the court document, Bowie served in Kuwait from April 2004 to April 2005 in support of Operation Iraqi Freedom.  While serving in Kuwait, Bowie became friends with former U.S. Army Major John Cockerham, who directed a government contractor to pay Bowie money in exchange for the award of a bottled water contract.  Bowie admitted that he received four wire transfers of approximately $100,000 each from the contractor between July 2005 and February 2006.  Bowie also admitted that he entered into a sham consulting agreement with the contractor to conceal the payments.    
Here is question: will Major Bowie be allowed to retire from the Army?  And as with so many of these corruption cases involving Army officers, one has to wonder why the military justice system is not prosecuting these officers.  Is the Army deferring to the DoJ?     

Monday, May 16, 2011

City of Dallas busted for ambulance fraud

Click here for a story about the City of Dallas getting busted for ambulance fraud.  Sheesh . . . what is the country coming to when you have one governmental entity ripping of another governmental entity.   

The comments to the article illustrate why our country is in such a fiscal mess.  For example, one commenter states:
This is a good example of why the federal government is in such bad financial condition. $40 million in fraud settled for $2.47 million? If it was intentional, somone (sic) should go to jail.

Saturday, May 14, 2011

Alarming high rate of nursing home residents are prescribed antipsychotic drugs for off-label uses

Sen. Chuck Grassley requested CMS investigate whether nursing home patients were being given antipsychotic drugs for off-label uses.  The findings are shocking.  CMS found that 88 percent of the powerful antipsychotic drugs being prescribed to nursing home residents with dementia were for uses that have not been approved by the Food and Drug Administration.  Click here Sen. Grassley's press release.  Click here for his letter to CMS. 

Here is the GAO report:


Wednesday, May 11, 2011

Court acquits Stevens

Federal Greenbelt U.S. District Judge Roger Titus granted a Rule 29 Motion today on behalf of Attorney Lauren Stevens.  The attached decision discusses the Crime Fraud Exception, reliance on the advice of counsel, and imperfect lawyer responses to a regulatory body.  Judge Titus concluded that access to the confidential privileged files should not have been granted by a Mass Magistrate Judge.  He found that the “responses that were given by the defendant in this case may not have been perfect; they may not have satisfied the FDA.  They were, however, sent to the FDA in the course of her bona fide legal representation of a client and in good faith reliance of both external and internal lawyers for GlaxoSmithKline.”  The Judge also found that as to all counts “relating to the question of advice of counsel, the evidence in this case can only support one conclusion, and that is that the defendant sought and obtained the advice and counsel of numerous lawyers…”  Finally, Judge Titus ruled “on the basis of the record before me that only with a jaundiced eye and with an inference of guilt that’s inconsistent with the presumption of innocence could a reasonable jury ever convict this defendant.”   He also discussed his sentencing of other lawyers and that “lawyers do not get a free pass.”

Here is the transcript:
110510 Stevens

Monday, May 9, 2011

S. Florida, Medicare Fraud, $200 million -- anybody surprised

DoJ announced that:

Two Miami-area corporations, American Therapeutic Corporation (ATC) and Medlink Professional Management Group Inc., pleaded guilty today in U.S. District Court in Miami for a fraud scheme that resulted in the submission of more than $200 million in fraudulent claims to Medicare, the Departments of Justice and Health and Human Services (HHS) announced.  According to court documents, ATC is a Florida corporation headquartered in Miami that operated purported partial hospitalization programs (PHPs) in seven different locations throughout South Florida and Orlando, Fla.  A PHP is a form of intensive treatment for severe mental illness. 
Medlink is a Florida corporation headquartered in Miami that purported to act as a “management company” for health care businesses.  In reality, ATC and a related company, the American Sleep Institute (ASI), were Medlink’s only clients.  ATC and Medlink are each charged with conspiracy to commit health care fraud in a superseding indictment unsealed on Feb. 15, 2011.  ATC is also charged in the superseding indictment with health care fraud and conspiracy to defraud the United States and to pay and receive illegal health care kickbacks.


Tuesday, May 3, 2011

Insider doctor blows the whistle on training hospital

The Boston Globe is reporting:
Dartmouth-Hitchcock Medical Center will pay more than $2.2 million to settle charges it improperly billed various federal health programs.  . . .  Prendergast [the whistleblower] told authorities the hospital improperly billed federal programs including Medicare, Medicaid, Veterans Affairs and the military's Tricare health insurance system for services delivered by resident physicians in training who were unsupervised by more senior attending physicians.  “Federal regulations and related guidelines allow physicians to bill for certain services provided by residents but only if those services are performed while a physician is present and the medical record contains appropriate documentation of the physician's presence," said a statement from the office of U.S. Attorney Tristram Coffin.

Monday, May 2, 2011

TRICARE extended to cover kids up to age 26

TRICARE has been expanded to cover a service member's children up to the age of 26.  Click here for the regs.  Good news for soldiers.  And good news for those that rip off TRICARE.  Click here for my earlier posting about the growing problem of health care fraud within the DoD.