Archive for April, 2013

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 www.fraudfighters.net.

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.


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