Arizona Hospice Companies Settle False Claims Act Lawsuit for $12 Million

April 16, 2013

A few weeks ago, the Department of Justice announced a $12 Million settlement it reached with Hospice of Arizona LC, American Hospice Management LLC and American Hospice Management Holdings LLC.

In order for hospice care to be reimbursed by Medicare, patients are required to have a life expectancy of, at most, six months.  Medicare patients admitted to hospices do not receive treatments to cure their diseases; instead, they receive treatment to provide comfort and relief from the symptoms of a terminal illness.

The qui tam lawsuit, filed against the companies in 2010, accused the defendants of submitting false claims to Medicare for patients who did not need to be admitted to the Hospice of Arizona.  Additionally, they were accused of submitting false claims by overbilling Medicare for some of the hospice’s services.

Ellen Momeyer, the whistleblower in this action, was a former Hospice of Arizona employee.  Pursuant to the whistleblower provisions of the False Claims Act, whistleblowers or relators can receive up to 30% of a settlement.  In this case, Momeyer will receive $1.8 million (approximately 15%) as her relator’s share of the settlement.

Medicare fraud is a serious and rampant problem that requires the help of courageous whistleblowers to root it out.  For more information on Medicare fraud and filing a potential whistleblower action, contact the attorneys at Tycko & Zavareei today.


United States Settles False Claims Act Case with Caddell Construction

April 5, 2013

Last month, the United States announced a $1.15 million settlement it reached with Caddell Construction, an Alabama-based construction company.  The settlement resolves allegations that Caddell submitted false claims to the Army Corps of Engineers about hiring and mentoring Mountain Chief Management Services, a Native American owned company, while working on projects at Fort Bragg in North Carolina and Fort Campbell in Kentucky.

Caddell was hired between 2003 and 2005 to build barracks at Fort Bragg and Fort Campbell.  As part of its contract with the Army, Caddell agreed to hire and mentor Mountain Chief Management Services under the Department of Defense’s Mentor-Protégé and Indian Incentive Programs.  Both programs provide reimbursements and rebates to participating companies for hiring and mentoring small disadvantaged and/or Native American-owned businesses.  According to the allegations, Caddell never actually trained Mountain Chief employees and no Mountain Chief employees actually worked on the projects.  Despite this, Caddell allegedly submitted invoices and supporting documents claiming that they were actually hiring and mentoring Mountain Chief.

The former director of business development at Caddell and the former president of Mountain Chief were both indicted on related charges in January 2012.  They are currently awaiting trial in the Federal District Court for the Middle District of Alabama.  Additionally, Caddell entered into a non-prosecution agreement with the United States in December 2012 where it agreed to pay $2 million and to cooperate with the criminal case.

Caddell took advantage of federal programs designed to help disadvantaged or small businesses.  This settlement helps right the wrong that they allegedly committed.  Further, it sends a signal to other companies who are engaging in similar behavior that their actions will not go unnoticed.

For more information on this and other False Claims Act settlements, visit our website at

Par Pharmaceuticals Settles Civil and Criminal Off-Label Marketing Charges for $45 Million

April 2, 2013

Last month, Par Pharmaceutical Companies Inc. pleaded guilty to federal criminal charges and agreed to settle civil allegations involving the company’s promotion of the drug Megace ES.  Par was fined $18 million and ordered to pay an additional $4.5 million in criminal forfeiture.  The company will also pay $22.5 million to resolve the civil allegations.

The civil suit accused Par of promoting Megace ES for non-FDA approved uses that were not covered by federal healthcare programs.  Megace was approved specifically to treat anorexia, cachexia and other significant weight loss suffered by patients with AIDS and HIV.  Par allegedly targeted sales of Megace to elderly nursing home patients suffering from weight loss.  The company was also accused of actively ignoring some of the negative side effects Megace ES has on elderly patients when promoting it on its marketing campaigns.  The criminal charges brought against Par also surround its labeling and misbranding of Megace ES.

Par’s settlement with the government resolves three separate but related whistleblower lawsuits filed against the company.  At least some of the five relators who filed these cases worked for Par or their affiliates and were able to provide incredibly helpful information and documents to the government.  Two of the whistleblowers, Mr. Michael McKeen and Ms. Courtney Combs will receive $4.4 million as their portion of the settlement.  Any payments to the other whistleblowers, Ms. Christine Thomas, Mr. James Lundstrom and Mr. Elliott, are unknown at this time.

Promoting off-label uses for prescription drugs is not only illegal, it can be extraordinarily dangerous.  When patients are given medicine for uses that have not been approved by the FDA the results could be disastrous.  Tycko & Zavareei commends the individuals who took a stand to stop Par’s selfish and unsafe practices.  If you are aware of a company using off-label marketing for its products, you have a duty to protect the individuals who could be harmed.  Contact the experienced attorneys at Tycko & Zavareei today to get more information about how to start your case.

Florida Dermatologist to Pay $26.1 Million to Settle False Claims Act Allegations

February 15, 2013

Earlier this week, the Department of Justice announced a $26.1 million settlement it reached with dermatologist Steven J. Wasserman, M.D. of Venice, Florida.  The settlement resolves allegations that Dr. Wasserman was performing medically unnecessary services and engaging in an illegal kickback scheme.  The DOJ classified the settlement as one of the largest ever settlements with an individual under the False Claims Act.

According to the complaint filed against Dr. Wasserman, he allegedly performed thousands of unnecessary skin surgeries on Medicare beneficiaries in order to get Medicare reimbursements for the procedures.  Additionally, Dr. Wasserman was accused of entering into an illegal kickback scheme with the Tampa Pathology Laboratory (TPL), a clinical lab in Tampa Florida, and Dr. José SuarezHoyos, a pathologist and the owner of TPL.  In return for sending biopsy samples to TPL for his Medicare patients, TPL allegedly gave Dr. Wasserman a diagnosis on a pathology report with a signature line for Dr. Wasserman to sign.  Dr. Wasserman then signed the reports and passed off the diagnoses as his own, collecting over $6 million in Medicare payments for work he never performed.

TPL and Dr. SuarezHoyos previously reached a separate settlement agreement with the United States.  The allegations brought against them were settled for $950,000.

Dr. Alan Freedman, a pathologist who worked at TPL from 2000 to 2003, became aware of the arrangement between TPL and Dr. Wasserman and filed his qui-tam lawsuit in 2004.  After years of investigations, the government intervened in the case and negotiated this significant settlement.  Dr. Freedman will receive slightly over $4 million as his share of the settlement.

Tycko & Zavareei is dedicated to stopping the rampant fraud that takes places in the heath care industry.  We are incredibly pleased that whistleblowers like Dr. Freedman are continually bringing forward new cases to help this effort.  If you are aware of health care fraud and need information on how to successfully bring your case, contact the attorneys at Tycko & Zavareei today.

Cooper Health Systems Settles Kick-Back Allegations for $12.6 Million

February 7, 2013

Last month, the U.S. Attorney’s Office for the District of New Jersey announced a $12.6 million settlement it reached with the Cooper Health System and Cooper University Hospital regarding a False Claims Act lawsuit that was filed against the company.  Cooper will pay $10.2 million of the settlement to the federal government and $2.3 to the State of New Jersey.

The lawsuit, filed in 2008, accused Cooper of paying illegal kickbacks to doctors in order to induce them to refer patients to Cooper.  Under the guise of a sham advisory board (the Cooper Heart Institute Advisory Board), Cooper allegedly paid high-volume medical practices upwards of $18,500 each to attend four meetings over the course of a year—meetings which were conveniently held at elegant banquet facilities.  According to the Complaint, the real goal of these meetings was to encourage medical practices to refer patients to Cooper.

The whistleblower in this case, Dr. Nicholas L. DePace, is a prominent Delaware Valley cardiologist.  He was invited to join the Cooper Heart Institute Advisory Board in 2007.  When he attended his first meeting, he understood that the advisory board and meetings were merely a front for paying kickbacks.  He filed his qui tam lawsuit in 2008.  His portion of the settlement has not yet been determined.

For more information on anti-kickback False Claims Act cases and how to go about filing one, contact the attorneys at Tycko & Zavareei today.

Two North Ohio Medical Centers Resolve False Claims Act Lawsuit for $4.4 Million

January 25, 2013

Earlier this month, the EMH Regional Medical Center and the North Ohio Heart Center Inc. (NOHC) agreed to pay $4.4 million to settle allegations brought against them in a qui-tam lawsuit.

The case was filed by the former manager of EMH’s catheterization and electrophysiology laboratory, Kenny Loughner.  It accused EMH and NOHC of performing unnecessary angioplasty and stent placement procedures on Medicare patients who did not necessarily need them.  Mr. Loughner will receive $660,859 as his portion of the settlement.

If you know of a company or individual committing health care fraud, you can help the government recover the stolen taxpayer dollars.  Contact the attorneys at Tycko & Zavareei today for information on how to initiate your case.

Former Owner of Princeton Review Agrees To Pay Up To $10 Million To Settle False Claims Act Suit

January 24, 2013

This past December, the Manhattan US Attorney’s Office announced a settlement it reached with Education Holdings, Inc., the former owner of nationally renowned test preparation company Princeton Review.  In May of 2012, Education Holdings sold Princeton Review to an uninvolved third party.

While it was doing business as Princeton Review, Education Holdings participated in a federally-funded program to provide Supplemental Educational Services (SES) in the form of after school tutoring to students who attended underperforming schools in New York City.  The New York City Department of Education paid Princeton Review a fixed sum per hour for each student it tutored.  The funds were provided to the NYC Department of Education by the federal government.

According to the False Claims Act complaint filed against Education Holdings, the company falsified student attendance records and submitted claims to the NYC Department of Education for tutoring services that it never provided.  Education Holdings admitted to the allegations and acknowledged that it had an incentive compensation program that encouraged the falsification of the records.

As a part of the settlement, Education Holdings will pay the United States $200,000 within five days of the settlement being finalized.  It will then pay $800,000 upon the sale of its sole remaining business asset.  Finally, Education Holdings will pay up to $9 million more depending on the sale price of the remaining business asset.

For more information on the False Claims Act and similar cases, contact us or visit our website at

Amgen Inc. Agrees To Pay $612 Million To Settle Ten False Claims Act Suits

January 24, 2013

At the end of this past year, the Department of Justice announced a huge settlement it reached with Amgen Inc., one of the largest biotechnology companies in the United States.  The settlement resolved accusations against Amgen regarding its sale and promotion of certain drugs.

The ten qui tam lawsuits against Amgen were filed in New York, Massachusetts, and Washington.  The settlement resolves allegations that Amgen improperly promoted the sale and use of a drug called Aranesp.  Aranesp is approved by the FDA for specific dosages and to treat very specific groups of patients suffering from anemia.  Amgen allegedly promoted Aranesp for unapproved doses and unapproved anemia patient groups such as individuals suffering anemia caused by cancer, chronic disease, and myelodysplastic syndrome.  The civil suits also accused Amgen of similarly promoting its drugs Enbrel and Neulasta.  The suits further allege that Amgen reported inaccurate pricing information for many of its drugs.

In addition to the civil settlement, Amgen accepted a guilty plea for its criminal liability resulting from its promotion of Aranesp.  The company will also pay $150 million in criminal penalties, bringing the total settlement to $762 million.

The overall settlement with Amgen is the single largest criminal and civil False Claims Act settlement involving a US biotech company.  The investigation and settlement was a massive undertaking that involved numerous state and federal agencies.  The attorneys at Tycko & Zavareei are proud of the collaborative effort the federal and state governments made in order to reach this settlement.  Additionally, we commend the numerous whistleblowers in these cases for taking active steps to stop Amgen’s fraudulent activities.

For more information on this settlement, visit out website at

Drug Manufacturer Sanofi US Settles False Claims Act Allegations for $109 Million

January 23, 2013

In December 2012, the Department of Justice announced a $109 million settlement it reached with Sanofi US, an international drug manufacturer, resolving False Claims Act allegations that were brought against the company regarding its knee injection drug, Hyalgan.

According to the complaint filed against Sanofi US, the manufacturer gave its sales representatives numerous free samples of Hyalgan.  The sales representatives would then allegedly enter into sales arrangements with physicians promising them a certain number of free samples for every purchase of Hyalgan.  By entering into these arrangements, Sanofi effectively lowered the price of Hyalgan.  Because Hyalgan and similar drugs from Sanofi’s competitors were reimbursed at the same rate by Medicare, there was a greater incentive for physicians to use Hyalgan.

The whistleblower in this case, Mark Giddarie, is a former sales representative for Sanofi.  Mr. Giddarie’s portion of the settlement has not yet been determined.  When he realized the alleged fraud his former employer was committing, Mr. Giddarie took important steps to stop Sanofi.  Because of the information he provided and his refusal to be a passive participant, Mr. Giddarie helped the US government recover over $100 million.

Health care fraud remains the leading type of fraud  committed against the United States Government.  In order to help our healthcare system become and remain sustainable, we need to help programs like Medicare and Medicaid from losing money to greedy companies.  If you have information about health care fraud, contact the attorneys at Tycko & Zavareei for information on how to begin filing your case.

Healthpoint Ltd. Agrees to Settle Medicare and Medicaid False Claims Act Case for up to $48 Million

January 2, 2013

The Department of Justice announced a settlement it reached with Healthpoint Ltd. and DFB Pharmaceuticals for up to $48 million.  The settlement resolves allegations that Healthpoint submitted false claims to Medicare and Medicaid for Xenaderm, a prescription skin ointment for the treatment of bed sores in nursing home patients.  The companies will pay $28 million now and an additional $20 million if there is a change in ownership of Healthpoint or DFB over the next three years.

According to the allegations, Healthpoint launched Xenaderm without any FDA approval.  Additionally, Healthpoint did not complete the required clinical studies on Xenaderm in order to ensure its safety.  Finally, Healthpoint was accused of promoting Xenaderm as being reimbursed by Medicaid—even though it was not.  This caused false claims to be submitted to Medicare and Medicaid for reimbursement of Xenaderm costs.

The settlement with Healthpoint and DFB is a part of a larger qui-tam False Claims Act case against numerous defendants.  The lawsuit was filed by whistleblower Constance Conrad and the government intervened in her case in January 2011.  Whistleblowers can receive up to 30% of the recoveries from False Claims Act settlements.  Ms. Conrad’s reward for the settlement with Healthpoint and DFB has not yet been determined.

If you are aware of a company committing fraud against the government, there are active steps you can take to stop them.  For a free consultation on how to bring your case, contact the attorneys at Tycko & Zavareei today.

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