WHISTLE BLOWERS HELP US RECOUP $9.3 BILLION

By KEVIN FREKING, September 1, 2008 

WASHINGTON (AP) — Whistle-blowers helped authorities recover at least $9.3 billion from health care providers accused of defrauding states and the federal government, according to an analysis of Justice Department records.

The department ramped up efforts in the 1990s to combat health care fraud by using private citizens with inside knowledge of wrongdoing. They now initiate more than 90 percent of the department's lawsuits focusing on health care fraud.

Whistle-blowers start cases by filing a sealed complaint in federal court. The department investigates the allegation and can intervene, assuming the lead role in the lawsuit. Whistle-blowers then get between 15 percent and 25 percent of the amount recovered.

Of the $9.3 billion recovered between 1996 and 2005, whistle-blowers got more than $1 billion, say analysts, writing for the Annals of Internal Medicine.

The analysts' findings are conservative.

Information was only available for about three-quarters of the 379 cases reviewed. Second, some of the largest recoveries have taken place after the period reviewed.

For example, the study doesn't include the single largest settlement, worth $920 million, which came against Tenet Healthcare Corp., one of the nation's largest hospital chains, in 2006.

Still, the study highlights some important trends in health care fraud.

While the number of claims pursued has dropped in recent years, recovery amounts have soared because of a late addition to the cast of defendants — pharmaceutical manufacturers. Recoveries jumped from about $10 million a case in 2002 to $50 million by 2005.

Drug makers are required to sell products to state Medicaid programs at the "best price" offered in the private marketplace. But the companies may artificially inflate the price, according to the report.

Another common scheme is to market drugs for uses not approved by the Food and Drug Administration.

For rest of article see:

http://ap.google.com/article/ALeqM5ihvX2KcsVV_Im_C5AmAEmiseWpcAD92U5R1G3

FROM KAISER DAILY HEALTH REPORT - July 2, 2008

Whistle-blower lawsuits alleging that pharmaceutical companies and government contractors defrauded the federal government have created a backlog of more than 900 cases at the Department of Justice, the Washington Post reports. According to the Post, more than 500 of the cases involve the health care and pharmaceutical industries, as well as Medicare and Medicaid.

Lawyers involved in the backlogged disputes say DOJ "cannot keep pace with the surge in charges brought by whistle-blowers," the Post reports. Since 2001, 300 to 400 civil cases have been filed each year; however, the 75-lawyer unit that reviews the allegations investigates about 100 cases annually. Whistle-blowers routinely wait 14 or more months to find out whether DOJ will get involved in the case, during which time whistle-blowers are not allowed to discuss or disclose the existence of such disputes. The government rejects about three-quarters of the cases it receives, saying the majority lack merit.

Some of largest the false-claims cases include a $650 million settlement reached this year with Merck in connection with an alleged failure to repay Medicaid rebates and a $515 million deal with Bristol-Myers Squibb to cover illegal drug pricing and marketing. The Post reports, "Even bigger lawsuits containing potentially explosive allegations are waiting in the wings."

Deputy Assistant Attorney General Michael Hertz last month told Congress that "the number and increased complexity of the fraud schemes presented to the department, combined with the volume of cases now under review, certainly present challenges." Patrick Burns, a spokesperson for Taxpayers Against Fraud, said, "Even if no new cases are filed, it might take 10 years for the Department of Justice to clear its desk. Cases in the backlog represent a lot of money being left on the table." Advocates of federal intervention to address the backlog note that verdicts and settlements in whistle-blower lawsuits have returned nearly $13 billion to the U.S. government in recent years (Johnson, Washington Post, 7/2).

http://www.kaisernetwork.org/daily_reports/rep_index.cfm?DR_ID=53086

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Lift up your hand, oh God. Do not forget the helpless. Psalm 10:12

http://www.physiciansforpeace.org/

It's popular to criticize government and  call for less government or less government intervention, but here is a federal government department, the Dept. of Justice, that is looking after the interests of the taxpayer and consumer by investigating and recouping money -- $9.3 billion --defrauded from the federal and state by unscrupulous practices by medical providers.

Health care fraud contributes to the rising cost of health care which is passed on to the consumer in higher premiums and to the taxpayer in larger government program expenditures.  Agressive and persistent investigation and prosecution by the Dept. of Justice will curtail such fraud, however, the Dept. of Justice must be adequately staffed and funded in order to investigate the hundreds of cases brought to their attention by "whistleblowers" -- insiders that work within these companies engaged in illegal practices.

Some cases of fraud successfully pursued by the Dept. of Justice:

In the case of the pharm company Merck:

"The drugmaker failed to pay the appropriate rebates to Medicaid and other goverment health care programs, and also paid kickbacks to doctors and hospitals to induce them to prescribe various meds. The allegations were brought in two separate lawsuits filed by whistleblowers under the False Claims Act. Merck has also agreed to a Corporate Integrity Agreement, which means good behavior is now required for the next five years.

. .  . In a separate suit filed by physician William St. John LaCorte in New Orleans, Merck was charged with creating a marketing scheme in which it provided substantially reduced prices for the Pepcid heartburn med once hospitals agreed to primarily use the drug instead of a rival pill. Merck allegedly offered these incentives to hospitals in order to obtain spillover business when patients would continue to purchase Pepcid once he or she was discharged.

. . . Under the two settlement agreements, the federal government will receive more than $360 million, and 49 states and Washington, DC, over $290 million. The interest brings the payout from $650 million to about $670 million."

Regarding the insurance company Amerigroup:

" Amerigroup will pay $225 million to settle allegations by federal and Illinois state authorities that Amerigroup's health plans denied coverage to pregnant women and people with health ailments in the Illinois Medicaid program, the insurer and the U.S. Department of Justice said on Thursday, Reuters reports (Dixon et al., Reuters, 8/14).

Cleveland Tyson, a former vice president of government relations at Amerigroup's Illinois subsidiary, in 2002 filed a whistle-blower lawsuit that claimed the company cherry-picked the healthiest patients to reduce spending. In March 2007, a federal judge in Chicago ruled against Amerigroup and awarded $334 million in the lawsuit."

Hospital chain:

The single largest settlement, worth $920 million, came against Tenet Healthcare Corp., one of the nation's largest hospital chains, in 2006.

http://www.kaisernetwork.org/daily_reports/rep_index.cfm?DR_ID=53993

http://www.pharmalot.com/2008/02/merck-to-pay-650m-over-medicaid-fraud/

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Lift up your hand, oh God. Do not forget the helpless. Psalm 10:12

http://www.physiciansforpeace.org/

You suggested a double penalty but the federal "False Claims Act" calls for triple damages.  

"The Act provides that if the fraud is proven, the defendant in a qui tam action is generally liable for three times the damages sustained by the Government because of the fraud. In addition, the defendant is liable for an additional $5,000 to $10,000 for each false claim it made to the Government."

In introducing amendments to the False Claims Act in 1985, Senator Charles Grassley explained the purpose behind the Act:

The government needs help -- lots of help -- to adequately protect the Treasury against growing and increasingly sophisticated fraud ... Part of the solution -- something I consider essential to any meaningful improvements in cutting down fraud -- is the establishment of a solid partnership between public law enforcers and public taxpayers. The Federal government has a big job on its hands as it attempts to ensure the integrity of the nearly $1 trillion we spend each year on various programs and procurement. That job is simply too big if government officials are working alone.

Thus, the False Claims Act is aimed at establishing a law enforcement "partnership" between federal law enforcement officials and private citizens who learn of fraud against the Government."

I'm guessin' the amendments to the False Claims Act may have dealt with whistleblower protection.

http://library.findlaw.com/2000/Nov/1/130252.html

 

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Lift up your hand, oh God. Do not forget the helpless. Psalm 10:12

http://www.physiciansforpeace.org/

I'm glad you found this post of interest.  Thanks for your comments.

I agree that sometimes the guilty get off too lightly.  Today in the news it was reported that the one time powerful Washington lobbyist, Jack Abramoff was sentenced to four years in prison for fraud, conspiracy and tax invasion.  He was part of a web of corruption and influence peddling that included lawmakers, lobbyists, Bush administration officials, congressional staffers and businessmen.  How many lives of citizens were affected by legislation and policy circumvented or stymied by their corrupt, illegal actions?

In the case of fraud by health care providers, it is not only a matter of the billions of dollars that was defrauded from programs for the poor, elderly and disabled, but the lives affected -- the sick people and the pregnant women denied coverage through Medicaid by the insurance company Amerigroup, the consumers that may have been prescribed and overcharged for medications that were part of illicit marketing schemes by drug companies.

Some call for less government, but the Department of Justice and its investigation and prosecution of fraud perpetrated against government programs, is an example of the important role government plays in protecting the taxpayer and consumer.

   

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Lift up your hand, oh God. Do not forget the helpless. Psalm 10:12

http://www.physiciansforpeace.org/