What Challenges Do Women Whistleblowers Face?

Cheryl Eckard received a whistleblower reward of over $100 million in 2010. But before she became a millionaire many times over, Eckard says she was the victim of retaliation.

Eckard, who worked in the compliance department of GlaxoSmithKline, filed a whistleblower lawsuit after being fired from the company in 2003. Her lawsuit claimed that she repeatedly expressed serious concerns to her superiors about compliance problems and quality assurance issues at the drugmaker’s Cidra plant in Puerto Rico prior to May 2003. Not long after sharing these concerns, Eckard allegedly received a call from GSK’s human resources department, informing her that she was to receive a redundancy package.

According to Eckard, she informed H.R. she wasn’t interested in the package, but was told that she had no choice. Even after she was fired, Eckard allegedly continued to try to get GSK to address Cidra’s quality control and compliance issues but was stonewalled. Years later, Cidra’s issues are now infamous.

In the end, GSK settled with the Justice Department for $750 million. The huge recovery would not have been possible had it not been for Eckard.

It goes without saying that whistleblowers face a difficult road in the pursuit of justice and are often the targets of retaliation. But what role does gender play in blowing the whistle? Are women whistleblowers more likely to be retaliated against?

A 2008 whistleblower study looked into these questions and more. Over 3,000 employees who participated in the study were given questionnaires that asked if they had “personally observed or had direct evidence” of any of 17 types of wrongdoing involving their organizations within the last year. The whistleblowers who reported wrongdoing (excluding those that reported anonymously) say they experienced the following types of retaliation:

  • 15% said they received poor performance appraisals.
  • 14% said they were more tightly scrutinized during daily activities by management.
  • 12% said they were verbally harassed or intimidated.
  • 11% said co-workers didn’t socialize with them.
  • 10% said information needed to successfully perform their job was withheld from them.
  • 9% said personnel and/or staff were withdrawn.
  • 9% said they were denied training opportunities.
  • 8% said they were assigned less important or less desirable tasks.
  • 7% said their professional reputation was harmed.
  • 7% said they were charged with committing an unrelated offense.
  • 7% said they were denied a promotion or award.  

What really proved interesting was the difference in treatment between male whistleblowers and female whistleblowers. According to the study, male whistleblowers were treated in accordance with their power within the organization. In other words, the higher up the company ladder a male whistleblower was, the less severe the retaliation. This proved not to be so for female whistleblowers, who received the same treatment “regardless of the amount of organizational power they held: Their status as women overrode their status as powerful or powerless organization members.”

Furthermore, the study found that when women blew the whistle on more serious misconduct or misconduct at higher levels within an organization, they were more likely to suffer retaliation. This did not prove to be the case for men.

So what is this study really saying?

  • A woman is more likely to suffer retaliation than a man.
  • A woman’s status within an organization is unrelated to retaliation. On the other hand, a male whistleblower’s status can and does, in some cases, insulate them from retaliation.
  • A woman will face greater retaliation in accordance with the seriousness of the wrongdoing they report.
  • The chance of a whistleblower being retaliated against is tied to their relationship with their boss. However, the effect of the retaliation is stronger for women than men.

AstraZeneca and Cephalon Will Pay Combined $54 Million to Settle Whistleblower Allegations

AstraZeneca and Cephalon (now owned by Teva Pharmaceuticals) have agreed to settle whistleblower claims that both knowingly underpaid rebates under the Medicaid Drug Rebate Program, which resulted in the government being overcharged for drugs. Both companies will pay a combined $54 million to settle the allegations initially brought in a 2008 whistleblower lawsuit filed by pharmacist and attorney Ronald Streck, who used to head a trade group for pharmaceutical wholesalers. Streck will receive a whistleblower reward for bringing the allegations to the government’s attention, though the amount has not yet been determined.

M_Id_473905_AstraZenecaIn order for their drugs to be covered under the Medicaid Drug Rebate Program, drug manufacturers are required to pay rebates every quarter to state Medicaid programs. The rebates are, in part, based on the average manufacturer prices (AMPs) reported to the government for each drug. Typically, a drug with a higher reported AMP amounts to a greater rebate to state Medicaid programs.

In his qui tam lawsuit, Streck claimed that AstraZeneca and Cephalon developed a scheme to underreport AMPs for a number of their drugs by improperly reducing the reported AMPs for service fees that both paid to wholesalers. Essentially, the lawsuit claims that both drug makers treated fees to pharmaceuticals wholesalers as price reductions when tabulating AMPs for their drugs. As a result of this deception, AstraZeneca and Cephalon allegedly underpaid rebates owed to the states, which in turn caused the government to be overcharged for payments to the states under the Medicaid Drug Rebate Program.

Settlement Terms

  • AstraZeneca: $46.5 million—Of that total, AstraZeneca will pay roughly $26.7 million, plus interest, to the federal government, and the remainder will go to states that participated in the settlement. The following AstraZeneca drugs were named in the whistleblower lawsuit: Crestor (cholesterol medication) and Seroquel (an antipsychotic).
  • Cephalon: $7.5 million—Of that total, Cephalon will pay roughly $4.3 million, plus interest, to the federal government, and the remainder will go to states that participated in the settlement. The following Cephalon drugs were named in the whistleblower lawsuit: Provigil (wakefulness, for people with uncontrollable sleepiness) and Actiq (pain management for cancer patients).

VMWare and Carahsoft to Pay $75.5 Million to Settle Whistleblower Allegations that Both Overcharged the Government by Concealing Commercial Pricing

VMware Inc. and Carahsoft Technology Corporation will pay $75.5 million to resolve whistleblower allegations that both companies violated the False Claims Act by misrepresenting commercial pricing practices and overcharging the government for goods and services purchased under contract. Delaware-based VMware is a company that specializes in computer virtualization software and Carahsoft, a Maryland corporation, is a distributor of information technology products.

logo_vmwareUnder the U.S. General Services Administration’s Multiple Award Schedule (MAS) Program, vendors seeking to earn government contracts are required to disclose their commercial pricing policies and practices to the GSA. During MAS contract negotiations, prospective vendors must disclose the “current, accurate and complete” discounts they offer to commercial customers so the GSA can negotiate fair pricing for government purchasers. After any MAS contract is awarded, regulations require that participating vendors continue to disclose any changes in their commercial pricing practices to the GSA. This includes any additional discounts vendors offer their commercial customers after any MAS contract is agreed to.

According to a Justice Department press release, VMware and Carahsoft submitted false statements to the government between 2007 and 2013 in connection with Carahsoft’s MAS contract for the sale of VMware products and services. The false statements allegedly hid both companies’ commercial pricing practices, which resulted in the government being overcharged for VMware’s products and services.

The agreement settles claims initially filed in a qui tam lawsuit by whistleblower Dane Smith, who was a former VMware vice president for the Americas. Smith’s share of the recovery has not been determined.

Today’s settlement shows how valuable whistleblowers are in the fight to stop fraud on the part of government contractors seeking to steal government funds at the expense of taxpayers. Our firm applauds Mr. Smith for coming forward with these allegations and bringing accountability justice to his former employer.

Community Health Network Agrees to Settle Medicare Fraud Lawsuit for $20.3 Million

Federal prosecutors announced yesterday that Community Health Network has agreed to pay $20.3 million to settle allegations that the health care provider had for years submitted false claims for Medicare and Medicaid reimbursement. Community Health operates seven hospitals in Indianapolis and has dozens of other medical facilities scattered throughout Central Indiana.

chn_vert_colorAccording to Assistant U.S. Attorney Shelese Woods, the settlement is related to contracts that Community Health had previously entered into with local ambulatory surgery centers not owned by the provider. The cost of performing surgeries at these centers was allegedly cheaper than the cost of performing the same surgeries at a Community Health hospital. The difference in price for the procedures could range from small (around $200) to quite substantial ($2,000).

The government contends that Community Health doctors would refer patients to surgery centers in an effort to cut costs. At the same time, Community Health allegedly submitted bills to Medicare and Medicaid claiming the surgeries had been performed at a Community Health hospital when, in fact, they were performed at the cheaper surgery centers. These alleged false claims resulted in the government overpaying for the surgeries.

Woods told the media that she believes Community Health had actually been engaging in the fraud laid out in the allegations since the late 1990’s, but the statute of limitations on health care fraud prevented the allegations from going back that far. Community Health purportedly stopped submitting bills in this manner in 2009. According to the Indianapolis Star, the provider no longer  has contracts with surgery centers.

The government notified hospitals back in November of 2007 that submitting reimbursement bills to Medicare for outside procedures and falsely claiming they were done in-house was not allowed. According to Woods, the damages from Community Health’s alleged scheme after this notice had been sent out totaled $9.35 million.

For-Profit Education Company to Pay $13 Million to Settle Whistleblower Allegations of False Claims for Federal Student Aid

A for-profit education company has agreed to pay $13 million to settle whistleblower allegations that it submitted false claims to the Department of Education for federal student aid. Education Affiliates (EA) of White Marsh, Maryland provides post-secondary education training programs in several professions at the company’s 50 campuses throughout the U.S.

education-affiliatesFive whistleblowers filed suit against EA, claiming that employees at the company’s All State Career campus in Baltimore were altering admissions test results in order to admit unqualified students. These employees were also accused of creating fraudulent high school diplomas and falsifying students’ federal aid applications. These claims resulted in criminal convictions for two All State Careers admission representatives and a test proctor.

The whistleblower lawsuits further contend that multiple EA schools were referring prospective students to “diploma mills” (unaccredited higher education institutions offering illegitimate diplomas for a fee) in order to qualify for federal student aid. EA campuses in Birmingham, Houston and Cincinnati also allegedly violated bans on incentive-based compensation for their enrollment personnel, made various misrepresentations concerning graduation and job placement rates, and altered attendance records and enrollment of unqualified students.

Today’s settlement provides repayment of $1.9 million in liabilities that resulted from EA awarding federal financial aid to students with invalid high school credentials that were issued by a diploma mill. As for the five whistleblowers who filed qui tam lawsuits against EA, they will share a reward of $1.8 million.

The Department of Education has made it clear that abusive behavior on the part of for-profit education companies will not be tolerated, and that it will continue to work with the DOJ and other federal agencies to hold post-secondary institutions accountable when they break the law.

The conduct outlined in these whistleblower claims represent predatory conduct that victimizes students and bilks money from taxpayers. Unfortunately, this type of behavior has become all too common among for-profit education companies. We need more people like these whistleblowers who exposed alleged wrongdoing at EA to come forward and report fraud. It is the right thing to do, it saves taxpayer money and can result in a sizable whistleblower reward if the government recovers stolen funds.

DaVita to Pay $450 Million to Resolve Whistleblower Allegations Claiming it Sought Reimbursement for Unnecessary Drug Wastage

The nation’s largest provider of dialysis services announced yesterday that it has agreed to pay $450 million to resolve whistleblower claims that the company violated the False Claims Act by seeking reimbursement from federal health care agencies in connection with unnecessary drug wastage.

CompanyLogos_davita logoDaVita Healthcare Partners, Inc., headquartered in Denver, has dialysis clinics in 46 U.S. states and the District of Columbia. The company is accused of knowingly creating unnecessary waste in the administration of two diabetes drugs, Zemplar and Venofer. Zemplar, a Vitamin D supplement usually administered at every dialysis session, is packaged in single-use vial sizes of 2 mcg, 5 mcg, and 10 mcg. Venofer is an iron supplement packaged at the time of these allegations only in a single-use vial size of 100 mg. Occasionally, the amount of the drug in the vials didn’t match the dosage specified by a doctor, resulting in the remainder of the drug needing to be discarded.

When the alleged fraud was taking place, Medicare would reimburse dialysis providers for certain waste if the providers (acting in good faith) discarded what was left of the drug contained in single-use vials after they had administered the requisite dose to a Medicare patient.

According to the whistleblower allegations, DaVita had protocols in place specifically designed to create unnecessary waste of Zemplar and Venofer. DaVita allegedly required its employees to provide the maximum amount of Zemplar to patients. The company would then turn around and bill the government for the amount of Zemplar administered to patients plus the amount “wasted.”

With regard to Venofer, DaVita had similar protocols in place that required nurses to administer the drug in small amounts and at frequent intervals in order to maximize wastage. In an example cited in the complaint, DaVita called for a patient to receive 25 mg of Venofer per week, resulting in 300 mg of waste per month that ended up being billed to the government. But if the order had been properly filled to give the patient the entire 100 mg vial once per month, there wouldn’t have been any waste.

Medicare eventually changed its single–vial waste reimbursement policies in 2011 to mitigate this problem. Once this change was made and the single-vial waste was no longer profitable for DaVita, it changed its practices and waste produced by the vials went down.

This case hinged on the sacrifice and courage of two whistleblowers, Dr. Alon Vanier and nurse Daniel Barbir. Both will share an as yet undetermined reward based on the amount recovered by the government.

New Attorney General Focuses her Attention on Medicare/Medicaid Fraud

The Department of Justice, in a nationwide sweep of Medicaid/Medicare cheaters, charged 243 people today with crimes related to their alleged involvement in health care fraud schemes that generated over $712 million in false billings. Attorney General Loretta E. Lynch and Department of Health and Human Services (HHS) Secretary Sylvia Mathews Burwell announced the nationwide sweep, led by the Medicare Fraud Strike Force, which was the largest takedown in the history of the Strike Force, both in terms of defendants charged and amount in fraudulent billings.

dept_justiceRevealing a possible change in policy, those indicted included forty-six physicians and other healthcare providers. In addition to the criminal charges, the Centers for Medicare & Medicaid Services (CMS) also suspended a number of providers from participating in government health care programs, cutting off their source of funding.

According to the Justice Department, the sweep caught doctors, patient recruiters, home health care providers, pharmacy owners, and a host of others. The defendants have been accused of various crimes, including money laundering, violations of anti-kickback statutes, aggravated identity theft and conspiracy to commit health care fraud.

The scams allegedly involved fraudulent billing for treatments ranging from psychotherapy to home health care. Those who participated in the scams allegedly submitted claims to Medicare and Medicaid for equipment that wasn’t provided, treatments that weren’t medically necessary and services that were never rendered.

During her speech today, Lynch described one example of a medical professional charged in the sweep:

A Michigan doctor allegedly prescribed narcotic pain medications to patients who didn’t need them. When the physician obtained the patients’ personal data, they billed additional charges as if the patient was obtaining the needed medications and services. If a patient tried to withdraw from the scheme, the doctor allegedly threatened to stop giving them the pain medications to which they had become addicted.

In Miami, Florida, 73 defendants were charged for their alleged involvement in schemes that accounted for over $263 million in false billings. In one example, the administrators of a Miami mental health center submitted nearly $64 million in billings between 2006 and 2012 for purported intensive mental health treatment to Medicare beneficiaries. The administrators allegedly paid kickbacks to patient recruiters and assisted living facility owners throughout the South Florida area.

The whistleblower law firm of Baum, Hedlund, Aristei & Goldman applauds the government’s effort in bringing these alleged criminals to justice. Many people depend on our nation’s health care system, especially those living through their most vulnerable moments. Health care fraud takes valuable resources from the sick and the suffering, and our firm is determined to help whistleblowers expose schemes that steal from State and Federal health care programs.


Hebrew Homes Whistleblower Receives $4.25 Million Reward in Landmark Case

A skilled nursing facility and its former president has agreed to settle a whistleblower lawsuit filed by a former executive who claimed that  the facility was engaged in paying illegal kickbacks to several physicians.  The Florida healthcare provider, Hebrew Homes Health Network Inc. and its affiliates, including all of  its operating subsidiaries and its former president and executive director, have agreed to pay $17 million to the United States government to resolve allegations that it violated the Anti-Kickback Statute.  The Relator claimed that the nursing facility paid doctors in exchange for Medicare patient referrals. Stephen Beaujon, the former CFO of Hebrew Homes, who filed the whistleblower lawsuit, will receive $4.25 million for bringing the alleged fraud to the government’s attention.

dept_justiceAccording to the Justice Department, Hebrew Homes allegedly operated a sophisticated kickback scheme between 2006 and 2013 in which they hired a number of doctors that were given the title of ‘medical director.’ These medical directors were under contracts that specified numerous job duties and hourly requirements, for which they were paid thousands of dollars per month.

The government alleged that these medical director positions only existed on paper, and that most of the medical directors were not actually required to perform their contracted job duties.  Rather, each was allegedly paid for patient referrals to Hebrew Homes facilities. Once the facility put the medical directors on the payroll, the government claims that Medicare patient referrals increased exponentially.

In addition to the $17 million, the settlement requires former Hebrew Homes president William Zubkoff to resign as its Executive Director and leave the company. It further requires Hebrew Homes to enter into a five-year corporate integrity agreement with the Department of Health and Human Services, Office of Inspector General (HHS-OIG). The Agreement also requires the company to change its policies concerning the hiring and maintaining of medical directors.

This represents the largest settlement in U.S. history involving alleged violations of the Anti-Kickback Statute by a skilled nursing facility. The Anti-Kickback Statute is intended to ensure that a doctor’s medical judgment is based solely on the wellbeing of a patient, not financial rewards.

The Hebrew Homes case highlights the government’s interest in encouraging whistleblowers to report fraud in skilled nursing home facilities.  This fraud preys on the elderly and infirm and is egregious.  Whistleblowers are incentivized to come forward if they have firsthand knowledge of fraud. The wellbeing of our country’s elderly population is compromised when health care providers put profit over patient health. Whistleblowers, who come forward and expose kickbacks and fraud, protect both the integrity of government health care programs and the health of our seniors.

If you have knowledge of health care fraud, it is in your best interest to consult with an experienced whistleblower attorney as soon as possible. The whistleblower law firm of Baum, Hedlund, Aristei & Goldman can help you decide the best way to move forward with a claim. Contact a whistleblower attorney today for a free case evaluation.

Whistleblowers Need to Know About This Key Legal Protection

You may not know this, but anti-retaliation provisions in the False Claim Act protect employees who were fired after their employer found out that the employee had been a whistleblower in a qui tam action against a previous employer. Put simply—your current employer can’t fire you because you filed a whistleblower lawsuit against your former employer.

PrintMatthew Cestra was hired by drug manufacturer Mylan Inc. in early 2011. During his first couple of months working as vice president of marketing, Cestra’s performance reviews said things like “exceeds expectations.”

Cestra would be fired in May of the same year. The company’s explanation: poor performance “over the last few weeks.” It makes you wonder—how was Cestra able to surpass expectations on the job, then take a such a dramatic performance nosedive so quickly?

According to Cestra, he wasn’t fired because of poor performance—he was fired because months after Mylan hired him, the company learned that he had filed a qui tam lawsuit against his previous employer, Cephalon Inc., now a subsidiary of Teva Pharmaceuticals. In that lawsuit, filed in 2010, Cestra claimed that Cephalon submitted thousands of false claims to Medicare and Medicaid for off-label uses of two of the company’s drugs.

After Cestra’s name became public in connection with the Cephalon lawsuit, he claims that his superiors created a hostile work environment before he was finally shown the door. He later filed a lawsuit against Mylan in Pennsylvania, claiming his termination violated anti-retaliation provisions of the False Claims Act.

Mylan fought the lawsuit and moved to have it dismissed by claiming it couldn’t be responsible under 31 U.S.C. §3730(h)(1) of the False Claims Act because it was not investigated for any violations of the False Claims Act and was unaffiliated with Cephalon. The statute protects “persons who assist the discovery and prosecution of fraud and thus to improve the federal government’s prospects of deterring and redressing crime.”

The Pennsylvania court sided with Cestra, claiming that he possessed a cause of action. His suit will move forward.


Former Chief Financial Officer at Georgia Hospital Receives Whistleblower Reward for Role in Exposing Kickback Scheme

It’s not every day that you hear about a hospital executive filing a qui tam claim against their former employer. Ralph D. Williams, the former chief financial officer of Walton Regional Medical Center in Monroe, Georgia, did just that and will receive a whistleblower reward of roughly $120,000 for his role in exposing a kickback scheme.

WRMC_logoBIGThe Department of Justice announced today that Health Management Associates (HMA) and Clearview Regional Medical Center (formerly Walton Regional) have agreed to pay $595,155 to settle Williams’s whistleblower claims that the hospital paid kickbacks to Hispanic Medical Management (DBA Clinica de la Mama) between 2008 and 2009. Clinica de la Mama is an obstetric clinic that primarily serves undocumented Hispanic women. HMA owned Walter Regional during the time of the allegations.

In return for the kickbacks, the hospital would receive patient referrals from Clinic de la Mama for labor and delivery at Walton Regional. The hospital would then submit false claims to the state Medicaid program of Georgia. According to the complaint, the kickbacks were disguised as payments for a variety of services purportedly provided by Clinica de la Mama.

In addition to the $595,155, HMA and Clearview will pay an additional $396,770 to settle the state of Georgia’s claims under the Georgia False Medicaid Claims Act. Undocumented immigrants are not eligible to receive Medicaid coverage, though the program does provide coverage for certain emergency situations, such as childbirth.

When hospitals pay kickbacks to solicit referrals for undocumented pregnant patients, it takes advantage of vulnerable women and compromises the integrity of taxpayer-funded programs like Medicaid. The whistleblower law firm of Baum, Hedlund, Aristei & Goldman applauds Mr. Williams for coming forward and bringing these allegations to the government’s attention.