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On May 3, 2013, Adventist Health System/West and its affiliated hospital White Memorial Medical Center agreed to pay $14.1 million to settle claims that they violated the False Claims Act. Adventist Health was charged with violating the Anti-Kickback Act, the Stark Statute, and the False Claims Act by improperly compensating doctors who referred patients to the White Memorial teaching hospital through the transfer of assets (such as medical supplies, non-medical supplies, and inventory) at less than fair market value and providing compensation to referring doctors at above fair market values.

For the second time in a week, Novartis has been sued by the federal government for alleged False Claims Act violations. Last week we announced that the federal government had intervened in a lawsuit against Novartis, in which the company was charged with fraudulently billing Medicare, Medicaid, TRICARE, and other federal and state-funding healthcare programs in connection with kickback schemes involving some of its drugs, including Lotrel, Valturna, and Starlix. This most recent lawsuit alleges that Novartis paid kickbacks to induce doctors to prescribe Novartis products and to induce pharmacies to switch patients on CellCept (a generic drug) to Novartis’s immunosuppressant drug, Myfortic.

As we announced last week, the U.S. Justice Department filed a case against Lance Armstrong and his company Tailwind Sports, alleging that Armstrong and Tailwind defrauded the U.S. Postal Service (USPS) out of millions of dollars in connection with the sponsorship of his cycling team. Now Armstrong’s legal team is fighting back, arguing that the benefits that the USPS received from putting its name on Armstrong’s jersey was worth more than the $40 million the USPS paid to sponsor the cycling team from 1998 to 2004. Armstrong’s lawyers point to four studies commissioned by the USPS indicating that the arrangement was worth more than $100 million in worldwide exposure for the USPS. According to various experts, while the government is not likely to have a problem proving fraud and False Claims Act violations, it may have a more difficult time proving damages.

Vitas Hospice Services LLC – the nation’s largest for-profit hospice chain –has been charged, along with its parent corporation Chemed Corporation and various other subsidiaries, with submitting false billings for hospice services. Vitas Hospice provides hospice services to patients in 18 states, including Illinois, Indiana, and Wisconsin. The lawsuit alleges that Chemed and Vitas Hospice knowingly submitted false claims to Medicare for hospice care for patients who were not terminally ill and for crisis care services that were not necessary, not actually provided, or not performed in accordance with Medicare requirements. Chemed is based in Cincinnati, Ohio and also owns Roto-Rooter Group Inc., a national drain cleaning and plumbing service company.

Montana hospitals St. Vincent Healthcare and Holy Rosary Healthcare agreed to pay $3.95 million plus interest to resolve claims that they violated the Stark Law and the False Claims Act by improperly providing incentive pay to doctors who made referrals to the hospitals.

Please contact us at (312) 863-7222 if you would like to learn more about any of the aforementioned whistleblower news updates or would like to schedule a free, confidential appointment with one of our nationally recognized whistleblower attorneys.