On Thursday, May 18th, 2017, the Department of Justice announced that two Southwest Missouri hospitals have agreed to pay $34 million to settle alleged False Claims Act violations involving improper financial relationships between the hospitals and referring physicians. According to the DOJ, Mercy Hospital Springfield f/k/a St. John’s Regional Health Center, and its affiliate, Mercy Clinic Springfield Communities f/k/a St. John’s Clinic, would compensate oncologists in part for referring chemotherapy patients to the hospitals’ infusion center, and subsequently submit false claims to Medicare for those services. The DOJ claims that the illegal financial benefit for referring physicians can skew doctors’ incentives in favor of overuse of services, and subsequently drive up healthcare costs. The false claims relator, a physician employed by the hospital system, will receive $5,440,000 from the settlement.
On Tuesday, May 16th, 2017, the Department of Justice announced that Omnicare Inc. had reached an agreement with the DOJ, the U.S. Attorney’s Office of the District of New Jersey and 28 states for an $8 million settlement for a False Claims Act Suit regarding unorthodox codes submitted for prescription drugs. Omnicare Inc. was accused of substituting the standard National Drug Code (NDG) with the less-specific “MEDID” code during the automated Stage II pharmacist verification process at certain pharmacy locations. The U.S. government alleged that Omnicare Inc. had deliberately adopted this practice for both convenience and additional business profit. The result, according to the government, was that the Omnicare submissions for generic drugs did not reflect the drugs actually dispensed to the patients, and the incorrect labels on the drugs interfered with Omnicare’s potential to track and recall them if necessary. More than $2 million will be allocated to the realtors of the case as their share of the settlement and to resolve their employment based claims under the False Claims Act.
The Whistleblower Team blog shares the latest in False Claims Act attorney and Qui Tam attorney news.