Quick! Call My Great-Grandchildren! I'm About to Give Birth!

July 17, 2014,

Elderly Couple.jpgIs the Government being short-sighted on this one? Medicare and Medicaid are skeptical about claims that ob/gyns are giving group counseling to nursing home residents. But surely if a group of you in your nursing home are 80 and pregnant, you need counseling?! It's hard enough giving birth in your 20's and 30's, but giving birth at 80 has got to be a challenge.

For some reason, Medicare and Medicaid are having a hard time believing that three Illinois ob/gyns and a thoracic surgeon gave regular psychotherapy sessions to patients pulled out of nursing homes. The four doctors charged Medicare for 37,864 group sessions in just one year. With that sort of epidemic of octogenarians giving birth, surely we need to pay doctors to give a whole lot of counseling!

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The Fine Art of Being in Two Places at Once, Part 2

July 14, 2014,

Mirror image.jpgHave you ever wished you could be two places at once -- say at work, helping with the school play, and at the gym - all at the same time? That would be great! But wait - what if you could talk your employer into paying you for doing one job AND convince him that AT THE EXACT SAME TIME you were in a different place doing a different job -- so he should pay you twice?!! What a splendid way to make double the income!

Believe it or not, some people actually think it is o.k. to charge the Government as if they were in two places at once. The Government often must rely on whistleblowers to warn it when people are trying to cheat Medicare -- and U.S. taxpayers.

According to a Watertown, New York newspaper article, Feds claim Carthage Area Hospital filed fraudulent Medicare claims,The Department of Justice has sued a Syracuse, New York hospital for double billing Medicare. According to DOJ, Carthage Area Hospital billed the government as if patients were receiving several different services, all at once, and at different locations around the hospital. DOJ says the New York hospital overcharged not just once, but 1900 times!

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SEC Shows It's Serious About Stopping Retaliation Against Whistleblowers

June 23, 2014,

Accounting calculating paper tape.jpg

For several years, Sean McKessey, the head of the Securities and Exchange Commission's Office of the Whistleblower, has told whistleblower lawyers like me that the SEC is really serious about putting a stop to retaliation. When the SEC wrote its whistleblower rules under the Dodd-Frank Act, it gave itself the right to go after companies that retaliated against people who reported illegal conduct. But until last week, the SEC had never used the rule.

Last week the SEC started making good on McKessey's promises. The Commission announced that an Albany, New York, hedge fund advisory firm and its owner would have to pay $2.2 million to settle charges of illegal conduct, including charges that they retaliated against the employee who reported the misconduct. Paradigm Capital Management and its owner Candace King Weir did not actually fire their head trader, the SEC said, but they did everything but. The hedge fund advisory firm demoted the employee to full-time compliance assistant. He lost his supervisory responsibilities, and was asked to "investigate" the fraud he already had reported. As my grandmother would have put it: "They did him wrong."*

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SEC Gives Its Eighth Whistleblower Award

June 16, 2014,

Falling percentage.jpgEarlier this month the Securities and Exchange Commission announced that it was paying $875,000 to two whistleblowers who had tipped the agency off to fraud. The SEC isn't saying what publicly-traded company committed the fraud, what the fraud was, or who the whistleblowers were. The agency did say that the award was split evenly between the two whistleblowers, and that the duo had received the maximum award of 30% of the fine against the company.

As a lawyer who represents whistleblowers, I have been blogging for several years about the status of the SEC Office of the Whistleblower, and this announcement gives us some important clues about where the SEC's whistleblower program stands.

First, is the SEC serious about its whistleblower program?

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Hands up - who wants extra chemotherapy? Anybody? Anybody? Bueller?

June 11, 2014,

Thumbnail image for Chemo.jpgLet's say you are going through chemotherapy. You are miserable, losing hair and your last meal by the minute. Could it get worse?

Why, yes, it could. How about if you learned that you sat there, receiving chemotherapy, for hours more than were necessary? And then let's say you found out that the reason you sat there for longer than you had to was because your doctor decided he would like to make more money, and having you sit there for longer was just the ticket?

According to a Department of Justice press release, Owners Of Elizabethtown Hematology Oncology, PLC Agree To Pay Over $3.7 Million To Settle False Billings To Government Health Care Programs, cancer doctors in Kentucky lengthened the time over which patients had to receive chemotherapy infusion treatments in order to get more reimbursement from Medicare and Medicaid. The fraud led to a False Claims Act lawsuit filed by a whistleblower.

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Heartless Hospital Performs Unnecessary Heart Surgeries? Wow.

June 9, 2014,

Tin Man.jpgEven before he got a heart the Tin Man would have been ashamed of this sort of behavior.

According to a DOJ press release, King's Daughters Medical Center to Pay Nearly $41 Million to Resolve Allegations of False Billing for Unnecessary Cardiac Procedures and Kickbacks, the Ashland, Kentucky, hospital has agreed to pay $40.9 million to the U.S. to resolve accusations that it fraudulently billed Medicare and Medicaid for unnecessary coronary stents and diagnostic catheterizations.

Screeeeech. Wait a minute. Putting coronary stents in patients who did not need them? Performing heart catheterizations on people who had no medical need for one? Are you serious?

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Ambulance Companies Take Medicare For a Ride

May 8, 2014,

Ambulance.jpgLet's say you have a dialysis treatment coming up. You could drive yourself to the clinic. On the other hand, an ambulance company says that it would be glad to give you a ride - but first, it would like to pay you cash of $100 to $400 a month.

Say what?

The federal Government has indicted a Pennsylvania company that allegedly agreed to do just that. According to U.S. attorneys in that state, Penn Choice Ambulance, Inc., bilked the federal government of $1.5 million by charging Medicare for ambulance rides for patients who were going to dialysis - even though the patients could have gotten there on their own. Sometimes the company even drove patients in their own cars! Of course, when Penn Choice wasn't billing huge amounts to Medicare, those same patients drove the cars on their own to other places.

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How Could a Doctor Do This to His Patients?

May 6, 2014,

Shot.jpgAccording to the Department of Justice, a Florida doctor was intentionally misdiagnosing patients with serious illnesses, just so he could make money for treating them. Now, according to a DOJ press release, Government Settles False Claims Act Allegations Against Florida-Based Baptist Health System for $2.5 Million, the hospital where Dr. Sean Orr worked is settling claims that it tried to cover up what Dr. Orr had done.

According to a Medicare False Claims Act lawsuit brought by a whistleblower, Dr. Sean Orr was not just misdiagnosing patients with ordinary illnesses; he was telling them they had potentially life-changing conditions, like multiple sclerosis and brain lesions. And Dr. Orr was not just an ordinary doctor; he was the chief doctor of the Baptist Medical Center in Jacksonville, Fla., and he had been the team neurologist for the Jacksonville Jaguars pro football team. When the hospital found out what Dr. Orr had done, it put Dr. Orr on administrative leave, but it did not tell the patients or the Government that the patients had been misdiagnosed. (Fla. Hospital Accused of Medicare False Billing Cover-Up, Law360).

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What Defense Contractor Tops the False Claims Act "Hall of Shame" List?

May 5, 2014,

Tank.jpgAccording to a list put together by two of my fellow whistleblower lawyers, Northrop-Grumman has paid more than any other defense contractor to resolve claims that it cheated the Government. In fact, on a list of top 20 largest payments made by defense contractors to resolve allegations of fraud, Northrop-Grumman made the list 4 times, coming in at 1, 3, 7 and 11.

The Government recovered a whopping $1,554,200,000 in just the top 20 cases, according to a list compiled by Mike Bothwell and Julie Bracker. Whistleblowers brought 75% of these 20 lawsuits, meaning the Government would not have known about 75% of these cases if it had not been for a whistleblower who reported the facts about the fraud.

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$12 Million Settlement in Suit by Pharmacists Against Texas Grocery Store Chain

April 28, 2014,

Thumbnail image for Thumbnail image for Pills, assorted.jpgAs a lawyer who represents qui tam whistleblowers, I did a double take when I saw that a grocery store based in San Antonio, Texas, is going to have to pay the state $12,000,000 to settle False Claims Act allegations. Since the False Claim Act only addresses fraud against the government, I was trying to figure out how HEB Grocery Company could have managed to cheat the government. Maybe the store was providing food for school lunches, or for the National Guard? Maybe the store had a contract to provide groceries to jails?

But as I read the article, Texas Grocery Chain Pays $12 Million In Settlement Of Medicaid Fraud Case, the charges were much more mainstream than I had been thinking. Many of the chain's grocery stores also had pharmacies - of course! - and three pharmacists accused the chain of Medicaid fraud. The trio alleged that HEB grocery was charging the Texas Medicaid program too much for some of the drugs it was dispensing to Medicaid payments.

Continue reading "$12 Million Settlement in Suit by Pharmacists Against Texas Grocery Store Chain " »

Here's One for the Little Guy: Small Business Whistleblower Wins $928,000 for Government

April 21, 2014,

Building construction.jpgThe Government has nabbed another company for making false claims in order to get loans from the Program for Small and Disadvantaged Businesses. According to a Department of Justice press release, Okland Construction Co., Inc., of Utah, will pay the Government $928,000 to settle U.S. claims that the company only pretended to be working with a small business when it worked nine contracts, mostly for construction projects at Nevada's Nellis Air Force Base.

To help small businesses, federal agencies are required to set aside a certain number of contracts, known as 8(a) contracts, that will be awarded to small businesses. In order to encourage small business development, the program also allows a larger corporation to act as a "mentor" for a smaller corporation. The mentor and the smaller corporation can form a joint venture and work together on the contract.

I represent whistleblowers who know about fraud against the Government, and lately I have seen several cases of small business contract fraud, where companies pretended to be working with small businesses to try to steal some of these 8(a) contracts. I have seen situations where big companies pretended to be small businesses. I even saw one very shocking situation where a large corporation claimed to be working with a smaller one - when in fact the smaller business not only was not working on the contract, it did not even know it supposedly had the contract!

Continue reading "Here's One for the Little Guy: Small Business Whistleblower Wins $928,000 for Government" »

This Couple Thought They Could Pull the Wool Over the Government's Eyes

February 26, 2014,

Sheep.jpgAn Iowa couple may be feeling a bit sheepish now that they have to repay the Government $1,376,670 they collected in subsidies for sheep they did not own. The sheepless couple was apparently trying to take advantage of subsidies administered by the Farm Services Agency (FSA) of the U.S. Department of Agriculture (USDA).

I'm a lawyer who represents whistleblowers who know about government subsidy fraud as well as other types of fraud against the Government. So I say with some authority that for shear audacity, this False Claims Act case ranks pretty high.

According to the Department of Justice press release, Money Judgment of $1,376,670 Rendered Against Iowa Couple For Violations of the False Claims Act, the Knoxville, Iowa, husband-wife team operated L & J Wool & Fur, a South Dakota corporation. Over a six-year period, Howard "Jack" Aleff and Reena Slominski submitted 132 false claims for payment under the Wool and Mohair Loans and Loan Deficiency Program.

In a publication from the United States Department of Agriculture ("USDA"), Marketing Assistance Loans & Loan Deficiency Payments, the USDA explains that the Wool and Mohair Loans and Loan Deficiency Program has two chief components. First, ranchers (farmers) raising sheep or goats can get a loan from the Government. If the price of wool drops below a particular rate that has been set by law - the commodity loan rate -- then the farmer can obtain the loan to allow him to hold on to his crop until later in the year, when presumptively the price will have increased again. In case the price does not rise, the farmer has the option of delivering the goods to the CCC as full payment for the loan. To discourage this course, the government has provided that the producer can repay less than the full amount of the loan, which will allow the farmer to sell his crop and still receive a "marketing gain."

Alternatively, the rancher or farmer can decide not to take a loan at all. In that case, the producer still can get a Loan Deficiency Payment (LDP). The producer will be paid the difference between the established loan rate for the applicable loan commodity and the repayment rate, multiplied across the full amount of the product produced.

Luckily for this Iowa couple, they did not need to take a loan - what with not having any sheep to feed or graze, their costs for non-farming were really quite low. Instead, they took the LDP option. Each year they fleeced the Government by submitting fake documents that made it look as if they actually raised sheep and had legitimate business transactions involving the sale of wool.

Apparently this pair not-owned a large number of sheep, because the LDP difference netted them an average of $50,000 a year. Of course, with careful breeding, it is possible that they were able to not-own more and more sheep over the years, as imaginary sheep begat cute, little imaginary lambs.

To ram the point home, the Department of Justice also prosecuted the duo criminally. Aleff and Slominski were given five years of probation, and shorn of $60,000 by way of a fine. They were also ordered to pay restitution of $303,890 to the Commodity Credit Corporation. The Commodity Credit Corporation (CCC) is a government-owned corporation that has been charged with stabilizing and protecting farmers' incomes and the prices of farm goods.

So tell me - does this fraud against the Government get your goat?

Maryland Company Accused of Letting Non-Doctor Read X-Rays

January 24, 2014,

Arm cast.jpgWhen he was 11, my son broke his thumb playing football. We took him straight for an x-ray. The doctors set his bone and gave him a cast, which delighted him because he got it in camouflage color and it meant he did not have to take notes at school. Four weeks later, the cast came off and he was fine. (In the meantime he broke his other thumb, too, and ended up with matching camouflage casts. I'll save that story for another day.)

But what if we had never found out that he had a broken thumb? What if the doctors had looked at the x-ray and said he had no broken bone and he did not need a cast? He might have wound up with permanent damage to his thumb.

That misdiagnosis is hypothetical for us, but according to the FBI it was not imaginary for several elderly people in Owings Mill, Maryland (near Baltimore) and Harrisburg, Pennsylvania. According to an article in the Baltimore Sun, Balto. Co. X-Ray Company Accused of Falsifying Reports, the FBI says that a company called Alpha Diagnostics let its vice president Timothy Emeigh review x-rays of patients. Emeigh was licensed as a radiographer, which is an x-ray technologist. However, under Medicare rules, a final x-ray review must be done by a licensed doctor - which Emeigh was not.

The FBI says that the fraud against Medicare reached $3.3 million before the Government shut it down.

Since I'm a whistleblower lawyer, of course one of my thoughts was -- who was the whistleblower? So far the Government is not saying.

But the Government is saying that the Medicare fraud had more than financial effects on taxpayers. According to the FBI, Emeigh blew the diagnoses for several elderly patients. At one Virginia nursing home, several patients had conditions that were overlooked because the x-ray was read wrong. The article does not say what happened to the patients who had the bad diagnoses.

Emeigh told the patient's doctors that he was sending the exams off for review by a crew of doctors who worked for another firm, Alpha Rads. According to the FBI, the company consisted of nothing more than Emeigh himself.

The FBI says the targets of the investigation are Emeigh and Alpha Diagnostics' CEO, Rafael Chikvashvili. Because the FBI is talking about fraud by Alpha Diagnostics, it is my bet that the Government will be pursuing a False Claims Act ("FCA") case against the company and both men in order to recoup the $3.3 million. Under the FCA, the Government is entitled to damages of between 2 and 3 times the amount of money that was stolen from it. If a whistleblower alerts the Government to the fraud and files the suit, the whistleblower is entitled to between 15 and 30% of what the Government recovers. The percentage that goes to the whistleblower varies depending on whether the Government takes over the case, or whether the whistleblower ends up pursuing the case on his own.

And here's a disconcerting fact about this fraud: way back in 1993 Emeigh had been fined by the Maryland Board of Physician Quality Assurance for "promoting an unqualified man to the position of X-ray technician at Alpha Diagnostics." No doubt Emeigh was emboldened by the fact that in that incident, the Maryland Board of Physician Quality Assurance gave him nothing more than a slap on the wrist, fining him just $1200 for conduct that could have caused patient harm.

Whistleblower Reveals Fraud Against Special Ed Kids

January 14, 2014,

Social Worker Sign.jpgI hate it when I see fraud against the Government, but I hate it even more when I see fraud against kids. I want to congratulate my friend and fellow whistleblower lawyer Ross Brooks for some great work he did in a suit that tried to stop some really callous treatment of schoolchildren - special education kids, at that.

Ross is a qui tam lawyer, like I am. Ross was representing Dana Ohlmeyer, a social worker who worked for the NYC Department of Education. Ms. Ohlmeyer discovered that the City of New York was pretending to offer psychological counseling services to special ed kids - but it was not really bothering to offer the counseling.

I don't know all the details of why these kids needed counseling, but apparently the need for these particular kids was strong enough that Medicaid was paying the Department of Education $223 a month to give each student two psychological counseling sessions. In other words, Medicaid was paying NYC a pretty steep price of $111.50 per session to counsel these kids.

NYC told Medicaid that it was giving these counseling sessions. It stuck its hand right out and collected all the money it was entitled to get for giving these counseling sessions. The problem was, NYC's own records showed that the students were not actually receiving the counseling they were supposed to get. The U.S. Department of Justice press release on the case, which settled yesterday, said New York City claimed it gave one poor kid counseling for 15 months between 2000 and 2003. The claim was false for 12 of those 15 months, because the kid got either 1 or 0 sessions during those 12 months.

How many times did NYC do this? Pretty darn many. NYC is paying the U.S. Government $1,375,000 to settle the claim.

I don't know the details of the case, because of course the personal details of the kids are not being released. However, you can imagine all sorts of reasons why these special ed kids needed the counseling. Medicaid would not have paid for it in the first place if these kids had not had a prescribed need for help.

So you have to figure that somewhere in New York City there was a kid who was dealing with being made fun of because he was "different" from the other kids. Another kid was trying to process the fact that he was handicapped - mentally or physically - because he had been abused by somebody he loved. Some other child had a serious mental illness and needed to talk about why she acted differently, and learn how she ought to interact with her peers or her teachers.

Whatever the child's story, NYC gave the kid nada. Medicaid paid NYC for the counseling, but NYC just did not provide it.

The United States Attorney for the Eastern District of New York, Loretta Lynch, made a very good point in the Government's press release: "When Medicaid shells out scarce dollars for services that are not provided, both the students in need of psychological support and the public fisc are harmed."

Hats off to social worker Dana Ohlmeyer, who saw what was happening and stood up for these special education schoolchildren. Congratulations also to Ross Brooks for his great work in bringing this conduct to the attention of the Government, and to U.S. Attorney Loretta Lynch and the team she marshalled, including Assistant United States Attorney Michael J. Goldberger and Department of Health and Human Services Office of Inspector General Special Agent Elysia Doherty, for the work they did in resolving the case.

I was disappointed to see that Ms. Ohlmeyer received just 15% of the amount the Government got, because that is the absolute minimum amount set by Congress. In my view, this case rang the bell in terms of fraud, because what was happening in NYC was hurting not just the federal government, but also a very vulnerable population. Surely we ought to do everything we can to encourage whistleblowers like Ms. Ohlmeyer.

Surprise! The Busiest Roads in Atlanta Are In -- DeKalb County?

January 13, 2014,

Thumbnail image for Atlanta roads.jpgI handle Atlanta car accident cases, and so I wanted to know more about what the figures are for the traffic in Atlanta. Anyone who has lived in Atlanta even fleetingly knows that traffic in Atlanta is everywhere, and it can be grim. Unfortunately, the more traffic that a road sees, the more accidents that occur on that road.

Most of Atlanta sits in Fulton County, with only a relatively small portion stretching across the county border into DeKalb County. Given how much more of Atlanta is in Fulton County, you would expect that Fulton County would have busier roads that carry a lot more traffic. Thus, it is truly surprising that - per mile of roadway -- Atlanta's DeKalb County roads are far, far busier than Atlanta's Fulton County roads.

According to Georgia DOT statistics, on Atlanta's Fulton County side, 1407 miles of road course through and around the city. These roads are among the busiest in the state. On average, they see 14,601,443.79 "daily VMT" - which stands for "daily vehicle miles traveled" - each day. The Georgia Department of Transportation (Georgia DOT) calculates this figure by looking at how many miles were driven on a road on an average day, when the miles driven by every car are added together.

The number of vehicle miles on Atlanta's Fulton County side is extremely large, and yet - relatively speaking - it is smaller than the number of vehicle miles on the DeKalb County side. While the roads in Fulton County see 14,601,443.79 vehicle miles per day, those miles are distributed across 1407 miles of roadway. The DeKalb side of Atlanta has only 298.17 miles of roadway, but still manages to rack up 11,993,015.21 daily vehicle miles traveled.

The reason for the difference is that the majority of the roads on the Fulton County side are smaller city streets, averaging barely over two lanes apiece. On the DeKalb County side, however, the majority of the roads are state routes averaging 5.49 lanes across. ("Lane miles" are calculated by counting the mileage for each lane separately.) Averaging in all of the types of roads - state routes, county roads and city streets - that run through Atlanta, the DeKalb County roads average 3.67 lanes across. The roads on the Fulton County side average only 2.54 lanes across. The primary reason for that difference is that on the Fulton County side, Atlanta has 1214.54 miles of city streets, while on the DeKalb County side it has only 89.59 miles of city streets. City streets tend to be local, residential roads, and are generally less trafficked than county roads, and especially less traveled than state routes. Thus, relatively speaking, the DeKalb County side of Atlanta has even busier roads than the Fulton County side.

Of course, any way you slice the data, the Atlanta roads on both sides of the county line see a tremendous amount of traffic every day, and in fact more than anywhere else in the state. Still, for anyone who looks at a map, the fact that so much of Atlanta could be in Fulton County, and yet so much of the traffic could be in the relatively smaller part of Atlanta that is in DeKalb County, is quite astonishing.