Monthly Archives: July 2014

Shipping Carrier to Pay Nearly $10 Million to Settle Improper Billing Charges

Matson Navigation Company, Inc. has agreed to pay the U.S. $9.95 million to settle whistleblower allegations that the shipping company allegedly made false claims to the U.S. Department of Defense concerning pricing practices. The claims were initially made by whistleblower Mario Rizzo, an Illinois freight consultant who filed the lawsuit against Matson and Horizon Lines – another major cargo carrier – in 2010.

MatsonRizzo claimed that improper billing caused the Department of Defense to overpay about $2 million per year for shipping. According to Rizzo, Matson falsely billed the Department of Defense for fuel costs associated with ocean transport when rail transport was actually used for some portions of shipping journeys.  Matson and Horizon denied the charges, saying they were only acting as subcontractors and were not subject to the government’s terms regarding carriage limiting or fuel subcharges for inland and overland transport.

Although the Department of Justice declined to intervene in Rizzo’s case, the whistleblower still prevailed by securing the $9.95 million settlement. Because the burden of litigation fell to Rizzo, he will be paid a larger whistleblower reward than he would have received if the government intervened in his case. According to Watchdog, Rizzo will receive a total of $3.45 million as his whistleblower reward, which includes court costs and fees he incurred during litigation.

This case highlights that whistleblower cases do not always require government intervention to be successful.  Although the prospects of winning a qui tam case can be reduced significantly without the resources of the federal government, there is still the possibility of a favorable outcome. In addition, if the government does not intervene in your case and you are still successful, the whistleblower is entitled to a larger percentage of any money returned to the government.

Dallas Doctor Faces 20 Years in Prison for Health Care Fraud

A Dallas doctor and hospital chain operator is facing 20 years in prison for stealing roughly $18 million from government health care agencies. Dr. Tariq Mahmood was found guilty today of eight counts of health care fraud, including conspiracy, and seven counts of aggravated identity fraud.

ambulance-1334534-mSeveral of Dr. Mahmood’s employees at Renaissance Hospital Terrell testified that Mahmood regularly insisted on upcoding services in order to obtain higher reimbursements from Medicare. Upcoding is a fraudulent practice where a health care provider assigns a code for services that is worth more money than the service actually provided.

Norma Longley, a coder for Mahmood’s hospital chain, testified that she noticed her Medicare reimbursement codes had been altered at another of Mahmood’s facilities after she had refused to follow his upcode orders. Government auditors began informing Longley that her Medicare billings were “riddled with mistakes,” according to the Dallas News.

Another coder claimed that she was fired for refusing to obey Mahmood’s upcoding orders. In many cases, Dr. Mahmood actually billed for services on patients “he had never seen,” according to his indictment.

Dr. Mahmood’s case received attention at the national level after a government panel said the case “raises broader questions about CMS’ ability to detect fraud in its programs.” Put simply, this case demonstrates why we need whistleblowers; maybe now more than ever. If you have been asked to upcode or have witnessed health care fraud on any level, you should seek the advice of an experienced whistleblower attorney to help you navigate your best course of action.

Justice Department Files False Claim Lawsuit Against Surgeon and Medical Device Manufacturer

The Justice Department filed a False Claims lawsuit today against Midwest Neurosurgeons L.L.C. and DS Medical L.L.C. claiming that the owners of both companies – Dr. Sanjay Fonn and Deborah Seeger, respectively – violated the False Claims Act and the Anti-Kickback Statute. Fonn and Ms. Seeger, his fiancée, allegedly conspired to benefit from the sale of spinal implants and other devices used during spinal fusion surgeries performed by Dr. Fonn’s hospital.

usa-dollar-bills-1431130-mAccording to the Justice Department, Dr. Fonn insisted that the hospital, where he performed surgeries, purchase necessary medical devices and supplies from DS Medical. Seeger earned “exorbitant commissions” from the sales. The money was allegedly used to purchase the house where Dr. Fonn and Ms. Seeger lived, as well as a boat, plane, and various home improvements. The Justice Department also claims that Dr. Fonn began performing more spinal surgeries and used more spinal implants in those surgeries after DS Medical began operations. Of course, the more operations he performed, the more money his fiancée earned in commissions.

“The Department of Justice remains committed to protecting federal healthcare programs from unscrupulous providers who seek to take advantage of those programs,” said Stuart F. Delery, Assistant Attorney General for the Justice Department’s Civil Division. “We are particularly concerned about schemes such as this one that not only waste taxpayer money but also pose a potential risk to patient safety.”

The DOJ’s claims are based on whistleblower allegations filed by several doctors, a spinal implant sales person and a former Midwest Neurosurgeons employee. The whistleblowers in this case are eligible to receive rewards of various amounts, depending on the information they provided the government.

This case highlights the need for whistleblowers to come forward and expose fraud. A doctor’s medical judgment should be based on the health and well being of their patients, not on lining their own pockets.

Obstetricians in Illinois Billing Medicare for … Group Psychotherapy?

Illinois Medicaid Director Theresa Eagleson noticed a peculiar billing trend a few years ago. Eagleson saw that patients in nursing homes were being transported to off-site locations for group psychotherapy sessions, which were often performed by obstetricians/gynecologists, oncologists, urologists and other physicians who “didn’t have any training really in psychiatry.” What’s worse, Medicaid was paying the bills for both the psychotherapy sessions and the transportation.

The state’s Medicaid program cracked down on these bogus therapy sessions by limiting patients to less than two sessions per week. The state also required any doctors to complete a psychiatry residency before being eligible to bill for group psychotherapy sessions. Despite the best efforts of the Illinois state Medicaid program, Illinois doctors continued to lead group therapy sessions, instead billing the federal Medicare program for the services. According to ProPublica, Medicare paid out more than 290,000 group therapy reimbursement claims to Illinois providers in 2012, by far the most claims in the country.

Below are some of the highest paid doctors to lead group psychotherapy sessions in 2012. Remember, these doctors had no background in psychotherapy:

  • Dr. Josephine Kamper (OB/GYN) – Medicare paid Kamper $207,980 for leading 10,400 sessions. She had previously been placed on two-year probation for failing to adequately evaluate a patient undergoing an abortion.

  • Dr. Lofton Kennedy Jr. (OB/GYN) – Medicare paid Kennedy for 9,154 sessions.

  • Dr. Philip Okwuje (OB/GYN) – Medicare paid him for 8,584 therapy sessions. Okwuje was barred from Medicare and Medicaid programs from 2002 to 2005 for unknown reasons.

  • Dr. Mark Lubienski (Thoracic Surgeon) – Medicare paid Dr. Lubienski nearly $200,000 for 9,700 therapy sessions.

You might be wondering what Medicare has done to stop what seems like fraud and abuse. According to the U.S. Centers for Medicare and Medicaid Services, there is no Medicare policy governing which physicians are permitted to perform group psychotherapy. When asked why Medicare hasn’t addressed this problem, Theresa Eagleson doesn’t have a good answer. “I’m sure we can always all learn from one another.”



Takeda Whistleblower Asks Supreme Court to Revive Lawsuit

takeda_485Dr. Helen Ge has asked the U.S. Supreme Court to revive her whistleblower lawsuit against Takeda Pharmaceuticals Company Ltd. Dr. Ge, a former medical reviewer at Takeda, filed a whistleblower lawsuit against her former employer in 2010 accusing the pharmaceutical giant of hiding the safety risks associated with one of their drugs. She states that during the course of her work she learned about dangerous side effects linked to Takeda diabetes drug Actos (pioglitazone), including bladder cancer and congestive heart failure.

Dr. Ge’s lawsuit was filed in U.S. District Court for the District of Massachusetts, First Circuit at a time when pleading standards for qui tam cases were “in flux,” according to her attorneys. She filed a pre-judgment request to amend her allegations before they were heard, but the court ignored her request and rejected her claims. Dr. Ge filed a post-judgment motion to amend, replete with expert testimony and declarations from other witnesses, but that too was ignored.

She and her lawyers filed a certiorari petition in April, asking the Supreme Court to weigh in on her case. Months later, with a decision on their petition still pending, Dr. Ge recently filed another brief in support of her previous request to have the Supreme Court decide whether whistleblowers should be granted leave to amend. Her attorneys claim that the case represents the perfect vehicle to address the inconsistencies in circuit court whistleblower proceedings. “Our system should not be about meeting specific technicalities, but getting to the merits of the case,” said R. Brent Wisner, part of Dr. Ge’s legal team at Baum, Hedlund, Aristei & Goldman.

The case is U.S. ex rel. Ge v. Takeda Pharmaceutical Co. Ltd. et al., case number 13-1236 in the Supreme Court of the United States.

Whistleblower Protections Expanded Under New Amendment

The San Onofre Nuclear Generating Station sits on the heavily populated shores of Southern California. Any nuclear disaster at the station would affect over 8 million people within 50 miles. Up until it was decommissioned a few years ago, workers at the San Onofre power plant voiced more safety complaints to the Nuclear Regulatory Commission (NRC) about that plant than any other nuclear plant in the country.

The NRC – an independent government agency that oversees commercial nuclear power plants – revealed in 2010 that workers at the San Onofre plant did not feel free to report safety concerns internally over fear of being retaliated against. The same year, a San Onofre plant worker-turned-whistleblower claimed he was fired after raising concerns to his superiors about a design flaw inside the plant’s steam generators. The whistleblower’s name is Paul Diaz and the flaw he pointed out could have resulted in catastrophe.

“We need more whistleblowers, not fewer.” – Congresswoman Jackie Speier

At the time he came forward, Diaz was not afforded whistleblower protection because the power plant sits on federal land that was ceded to Southern California Edison in the 1960’s. Diaz’s whistleblower complaint against the plant and Southern California Edison caught the attention of California lawmakers like Congresswoman Jackie Speier. Congresswoman Speier, long an advocate for whistleblowers, recently proposed an amendment to the Energy and Water Development and Related Agencies Appropriation Act of 2015 which clarifies that the Department of Energy “must protect non-federal employee whistleblowers from retaliation.” The amendment was passed recently according to a press release from her office in Washington.

“The Department of Energy has allowed its contactors to stifle whistleblowers through illegal workplace secrecy agreements and taxpayer-funded lawsuits to the detriment of taxpayers, said Congresswoman Speier in a statement. Without whistleblowers at the San Onofre Nuclear Generating Station in California there could have been a Fukushima-like meltdown.”

“By preventing workers from reporting health and safety violations, the DOE is jeopardizing billions of taxpayer dollars and the public’s safety. The stakes at these facilities, which handle some of the most dangerous materials on earth, are far too high for this kind of bad practice.”

The whistleblower attorneys at Baum, Hedlund, Aristei & Goldman applaud Congresswoman Speier for her efforts to broaden protection for non-federal whistleblowers that come forward with information concerning safety violations, waste, fraud and abuse. These brave men and women are performing a vital public service for all of us and they should be praised and rewarded, not threatened.