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The whistleblower attorneys at Goldberg Kohn are committed to fighting fraud against the government and protecting the rights of whistleblowers. Below are summaries of recent developments pertaining to whistleblower and qui tam actions throughout the country.

In light of the sequester, the IRS has announced that it will reduce any whistleblower awards that it pays by 8.7%. Unfortunately, the IRS’s misguided attempt to save government money will only hurt those people who succeed in saving government money, as many commenters have pointed out.

Techota, LLC has agreed to pay the United States $150,000 to resolve claims in a federal qui tam lawsuit alleging that the company violated the False Claims Act by making false claims for payment to Medicare for home health care services that were not eligible for reimbursement because the services were not medically reasonable and necessary, nor were they provided under a valid plan of care. Though the settlement amount was not extraordinarily large, the Department of Justice expressly acknowledged the assistance of private legal counsel to the plaintiff whistleblower in reaching the settlement. The settlement resolves claims in the federal lawsuit that Techota, LLC, billed Medicare for home health services.

The Florida House Civil Justice Subcommittee has unanimously approved legislation that seeks to modernize the Florida False Claims Act by granting law enforcement officials the authority to issue subpoenas for non-Medicaid fraud cases. Currently, the Florida law does not grant law enforcement the ability to issue subpoenas in non-Medicaid fraud causes, which makes it difficult for the government to determine whether to intervene in these actions.

In addition to a number of provisions that conform to the federal False Claims Act, the Florida legislation also expands on the federal False Claims Act by extending false claim actions to include those involving state level government officials and those committed against the “state” and not just “agencies." Moreover, the bill provides for civil penalties of up to $100,000 for individuals and $1 million for other entities that create or destroy evidence when a subpoena is pending.

The proposed legislation would go a long way in helping Florida to recover misappropriated funds and would make facilitate compliance with the Deficit Reduction Act, allowing Florida to receive more money in cases involving allegations of Medicaid fraud.

Former sales reps of Warner-Chilcott have brought a false claims case against the company alleging that the drug maker engaged in fraud. While the complaint includes many typical allegations, such as kickbacks to physicians, the complaint also includes allegations that the company was engaged in a massive scheme to defraud the government. For instance, the complaint alleges that the company instructed sales reps to complete prior authorization forms (a potential violation of patient privacy laws), distributed non-sanctioned clinical studies obtained from the Internet, offered inducements to committee members who made placement decisions for insurers, encouraged doctors to use coupons for Medicare beneficiaries, and deliberately hired young, inexperienced sales reps in order to avoid potential push-back about the devious practices from more experienced sales reps.

Sales reps were also allegedly instructed to pay for “happy hours” for physicians, use aggressive and inappropriate sales tactics to pressure doctors who failed to prescribe Warner-Chilcott drugs, to offer speaking engagements to doctors who prescribed more Warner-Chilcott drugs, and to host dinners at expensive restaurants that were then billed as “Med Ed” meetings even though they were informal, social meals.  Sales reps who refused to comply with the company’s directives were routinely fired.

The Warner-Chilcott pharmaceuticals at issue – Actonel and Atelvia (osteoporosis medications), Asacol (used to treat) ulcerative colitis, Doryx (an antibiotic used to treat acne), Loestrin and Femcon (oral contraceptives), and Enablex (used to treat overactive bladder) – were the subject of a subpoena issued last year by the U.S. Attorney in Boston.