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Whistleblower Actions andHealthcareShauna Itri, ESQ.267-973-4265www.linkedin.com/in/shaunaitri/1
Speaker Biography:Shauna ItriShauna is a partner at Seeger Weiss LLP and representswhistleblowers in False Claims Act lawsuits in state andfederal courts throughout the United States, and tax andsecurities whistleblowers with claims under the IRS andSEC whistleblower programs. She received a B.A. and anM.A. from Stanford University, where she captained theUniversity’s Women’s soccer team and received her J.D.from Villanova University. She is presently an adjunctprofessor at Widener Law School, teaching a white-collarcrime and corporate deviance course.2
Overview of Whistleblower LawsFederal andState FalseClaims iaInsurance FraudPrevention Act3
Introducing the FalseClaims Act4
The False Claims Act Allows citizens with evidence of fraud against governmentprograms to sue on behalf of the government Whistleblower may be awarded a portion of the funds recovered5
History and Amendments “Lincoln’s Law ” Solution for Defective Military SuppliesNot Enough Federal Investigators toProperly Investigate Contracting Crimes6
False Claims ActMarch 18637
1943 AmendmentsFCA Weakened by Congress in 1943 during WW2 Due toNumerous Suits Filed Against Defense Contractors in anImproper Manner8
1986 Amendments 1986 - greatly strengthenedthe false claims act inresponse to over chargingby defense contractorstreble damages 5000-10,000 per falseclaimincreased the % of therecovery to the relator to15-30%9
600Toilet Seat10
7000Coffee Pot11
2010 Affordable Care actProvisions of theACA significantlystrengthen oncemore the FalseClaims Act12
State FalseClaims Acts Generally, Modeled After the Federal FCA* Medicaid OnlyIncludes Tax – New York13
State FalseClaims ActsCaliforniaLouisiana *North CarolinaColorado *Maryland *OklahomaConnecticut *MassachusettsRhode IslandDelawareMichigan *TennesseeDistrict of ColumbiaMinnesotaTexas ew Hampshire *Washington *IllinoisNew JerseyIndianaNew MexicoIowaNew York14
The False Claims Act,Procedurally Speaking15
False Claims Act: Procedural Steps16
The False Claims Act,Generally Speaking17
False Claims Act: Generally Important Tool In Fighting Government Waste, Fraud & Abuse Over 40 billion recovered in 29 years18
False Claims Act: Types of CasesSource: Gibson Dunn “2015 Year-End False Claims Act Update” (January 6, 2016)19
Who Can Be a Whistleblower?InsiderCompetitorFormerInsiderAny one with“Knowledge”20
Who to Sue?CompaniesParent Companies(maybe)Individuals(maybe)Solvent/Ability toCollectCo-Conspirators21
Examples of Fraud UnderThe False Claims Act,Specifically Speaking22
Examples of FraudUnder The False ClaimsAct23
Examples of Fraud Under the False Claims Act Inpatient v. Outpatient: Performing and billingprocedures as inpatient procedures when the government believethey should have been performed as outpatient procedures.Unlicensed Billing: Billing for the services of improperly licensedpersonnel or for professionals excluded from participation inMedicare and Medicaid.Upcoding: Falsely representing that patients received a morecomplex or expensive service than what was actually provided.24
Examples of Fraud Under the False Claims Act:Continued Charging For Services Or Supplies Not Provided : submittingclaims to the Medicare or Medicaid for services or supplies that theprovider did not deliver to a patient or beneficiary.Falsifying or Failing to Maintain Records : Medicare and Medicaidwill only reimburse a provider for services or supplies if thoseservices or supplies are medically necessary. Providers are requiredto maintain various forms of documentation demonstratingmedical necessity. If a provider or supplier either falsifies thoserecords, or fails to maintain them, then the provider may becommitting fraud when it submits claims for payment to theMedicare or Medicaid.25
Grant Fraud and theFalse Claims Act26
Grant Fraud“Northwestern University To Pay Nearly 3 Million To TheUnited States To Settle Cancer Research Grant Fraud Claims” –Department of Justice.27
Kickbacks:Payment (Kind) of Something of“Value” In Exchange for Referrals Any28
NOT KICKBACKS: US ex rel. Shapiro v. Medtronic General allegations; amounted to little more than claimingMedtronic sponsored conferences, reimbursed attendees forsome expenses, provided food and promoted the devices.KICKBACKS: Sham Studies Biovail 24 M Settlement in May 2008 Cardizem Sham Study 1000 per enrollee 1 month: prescribe drug, three visits, small questionnaire Stated objective accelerating uptake Rxs among doctors Exorbitant payments ( FMV!!) in exchange for referrals Employment Arrangements above FMV: Tuomey Hospital (verdict 45million) and Covenant Medial Center (settlement 4.5million) Sham Directorships: McAllen Hospitals ( 25 million settlement) Bogus Lease Arrangements: see aboveKickbackExamples29
Clinical Trial Billing30
Clinical Trial BillingFraud Examples Billing for services that are part of a nonqualifying clinical trial Double Billing Using Research Funds for Routine Care31
Off-Label Marketing ofDrugs32
Off-Label Marketing ExamplesOff-label use is the use of drugs/devices for an unapprovedindication or in an unapproved age group, unapproved dosage, orunapproved form Drugs: U.S. ex rel. Franklin v. Parke-Davis: Pfizer promoted Neurotonin (indicatedfor seizures associated with epilepsy) for pain/psychiatric disordersDevices: U.S. ex rel. Colquitt v. Abbott Laboratories: scheme to thwart the FDAapproval process for vascular stents by fraudulently obtaining FDA clearance fordevices33
Medical Necessity Billing for services that are not medically necessary “Objective falsity” test Battle of Medical Experts Case-by-Case File Review Examples: Americare Ambulance: Ambulance TransportsSkin Cancer Center: MOHS Procedures34
Pricing Fraud AWP Wholesale Litigation:Defendant PharmaceuticalCompanies Inflated benchmark AWP. Rebate Fraud: Drug manufacturerclassify drugs as generic to avoidobligation to pay higher rebatesunder the Medicaid Drug RebateProgram35
Adverse Events Reporting Guidant withheld information about a lifethreatening defect in its implantable cardiacdevices In June 2005, the company finally went publicabout the problem with information it had knownfor 10 months Settled 30 million; 2.25 million relator share36
Fraud/Misconduct in Device ApprovalProcessAgilent Tech., paid 7 million to settle allegations that it sold faulty medicalmonitoring devices to the government and failed to properly investigateproduct failures even though the company was aware of them
Commercial Good ManufacturingPractices If not inline with cGMP then adulterated and misbranded andnot in “approved” form and ineligible for governmentcoveragecGMP Violations basis for FCA case Ranbaxy – settle for 500M in 2013GSK- settle for 750M in 2010UNTIL US ex rel. Rostholder v. Omnicare (4th Cir) February2014 Repackaging in violation of cGMPsDrugs were covered even if adulteratedFCA not a “sweeping mechanism to promote regulatorycompliance”
Decision Making “TakeAways”39
Whistleblower Options Not Report the Fraud at All (move on or potentially commit fraud)Report the Fraud Internally - Company fixes the problem or explainswhy not fraud, Continue Fraud, RetaliationReport the Fraud to Government – Deal With the ConsequencesExplore Option of Filing a Whistleblower Case – Consult WithQualified Attorney Free of Charge40
Pros and Cons of Filing and NOT Filing aWhistleblower Case41
Traps for the Unwary BankruptcyDivorceParallel LitigationLawfully Obtain EvidenceCounter ClaimsSealSeverance Agreements and Release of Claims42
California InsuranceFraud Prevention Act43
CaliforniaInsuranceFraudPrevention Act California Private Insurance Qui Tam Statuteallows individuals to sue on behalf of private insurancecompaniesSimilar procedurally but California InsuranceDepartment and District AttorneyLittle Case Law evention-actcalifornia-qui-tam/44
Contact Information:SHAUNA com/in/shaunaitri/45
SEC whistleblower programs. She received a B.A. and an M.A. from Stanford University, where she captained the niversity's Women's soccer team and received her . from Villanova University. She is presently an adjunct professor at Widener Law School, teaching a white-collar crime and corporate deviance course. 2
