Qui Tam 101

Inflated Cost Reports Cost California Hospital Over $2 Million to Settle False Claims Act Allegations

On April 20, 2007, the Loma Linda Behavioral Medicine Center paid the United States government in excess of $2 million to settle allegations of overbilling from 1992-1996.  The settlementis the result of a lawsuit filed by a whistleblower under the False Claims Act.  The lawsuit was originally filed in 1998 by a former employee of Healthcare Financial Advisors (HFA), a consulting firm that assists hospitals in preparing cost reports that are submitted to insurers.  The lawsuit alleged that Healthcare Financial Advisors prepared for clients two costs reports; one which was inflated and sent to Medicare and another one designed for internal use only, that accurately reflected the amount of reimbursement the hospital should have received from Medicare.  It should be noted that seven defendants thus far have settled the HFA whistleblower lawsuit, paying approximately $55 million to the government. (Jackson Memorial Hospital in Miami, Florida more than $14 million; St. Elizabeth Regional Medical Center in Lincoln, Nebraska more than $4 million, Lovelace Health System, a wholly owned subsidiary of Cigna Corp. based in Albuquerque, New Mexico, paid $24.5 million in 2002; St. Joseph’s Hospital in Houston, Texas, paid the government $1.5 million in 2002; Eisenhower Medical Center, located in Rancho Mirage, Calif., paid $8 million in 2005 and HealthSouth Bakersfield Rehabilitation Hospital in Bakersfield, Calif., paid $740,000 in 2005).

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DOJ May Join False Claims Act Lawsuit to Collect $30 Million Relator Share

$15.5 Million Owed to Feds By Houston Hospital District

House Committee Passes Whistleblower Bill Which Effectively Offers a Safety Net for Qui Tam Relators who were Retaliated Against

The House Government Reform Committee earlier this month passed a bill intended to strengthen and extend federal employees’ rights when disclosing agency misdeeds.

It is called the Whistleblower Protection Act of 2007 and was introduced by Committee Chairman Henry Waxman, D-Calif., and Ranking member Tom Davis, R-Va., along with Reps. Todd Platts, R-Pa., and Chris Van Hollen, D-Md. Although the law would only shield federal employees disclosing “any” waste, fraud or abuse from retribution, it extends the WPA protection to contractors. With so many qui tam whistleblowers coming from the government contractor ranks, this adds a second level of protection, particularly in federal circuits that have greatly limited the scope of 3730h.

RightCHOICE Managed Care Chooses Settlement in False Claims Act Case

Right Choice Managed Care is paying the United States Government $975,000 to resolve allegations that it overcharged the Federal Employees Health Benefits (FEHB) Program. The whistleblower in the case initially filed against Wellpoint Health Networks , which merged into/with Right Choice after the lawsuit was filed.

“This civil health care fraud settlement should send a signal to all health care providers who receive federal funds that we are committed to protecting the health care system from fraud or abuse,” said Catherine L. Hanaway, U.S. Attorney for the Eastern District of Missouri.

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Unlawful Use of Grant Money Costs Cancer Institute $2.3 Million

The Institute for Cancer Prevention (IFCP) has agreed to pay $2.3 million to resolve civil False Claims Act charges as well as potentially other claims arising from their improper receipt and use of federal grant money. IFCP was a not for profit medical research foundation located in Valhalla, New York. Although currently bankrupt, IFCP formerly derived approximately 90% of its funding from federal grants and contract from the National Institute of Health.

IFCP was permitted to use the grant money only for payment of specified federal grant expenses that were immediately due and owing. However, in 2002 and 2003, IFCP allegedly used approximately $5 million to pay bills from federal grant money that was not eligible for reimbursement under its federal grants. Further, IFCP submitted false reports regarding its use of grant money to the United States Department of Health and Human Services.

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