On January 21, 2020, the Department of Justice (DOJ) announced a $3 million settlement with Patient Services, Inc. (PSI) to resolve allegations of False Claims Act (FCA) violations. The DOJ alleged that PSI enabled three pharmaceutical companies to pay kickbacks to patients by funneling money to patients taking drugs manufactured by those same pharmaceutical companies. In addition to the $3 million, PSI has entered into a three-year integrity agreement with Health and Human Services’s Office of the Inspector General. The settlement involved no determination of liability.
Continue Reading DOJ Reaches Settlement with Patient Assistance Foundation Resolving Allegations of FCA Violations
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DOJ Reaches $21.36 Million Agreement with Compounding Pharmacy, Two of its Executives, and Managing Private Equity Firm to Resolve FCA Allegations
On September 18, 2019, the Department of Justice (DOJ) announced a $21.36 million settlement with compounding pharmacy Patient Care America (PCA), as well as PCA’s Chief Executive, PCA’s former Vice President of Operations, and a private equity firm (PE Firm) that managed PCA on behalf of investors. The settlement resolves a False Claims Act (FCA) lawsuit alleging involvement in a kickback scheme designed to generate unnecessary referrals for prescription pain creams, scar creams, and vitamins reimbursed by TRICARE, the federal health care program for military members and their families. No determination of liability was made as part of the settlement. See our prior analysis of DOJ’s intervention in this case here.…
Continue Reading DOJ Reaches $21.36 Million Agreement with Compounding Pharmacy, Two of its Executives, and Managing Private Equity Firm to Resolve FCA Allegations
Government Continues to Closely Scrutinize Pharmaceutical Marketing Practices
On September 4, 2019, the Department of Justice (DOJ) announced a $15.4 million settlement with pharmaceutical company Mallinckrodt ARD LLC (Mallinckrodt) to resolve alleged violations of the Anti-Kickback Statute (AKS) in two whistleblower suits filed under the False Claims Act (FCA). The settlement addresses allegations of AKS violations between 2009-2013 by sales representatives of a company later acquired by Mallinckrodt via the “wining and dining” of physicians to induce Medicare prescriptions of that company’s drug. Interestingly, the settlements do not cover related allegations within those FCA suits that Mallinckrodt improperly used a patient assistance foundation to “pay illegal kickbacks in the form of copay subsidies” for the same drug.…
Continue Reading Government Continues to Closely Scrutinize Pharmaceutical Marketing Practices
DOJ Intervenes in FCA Suit Against Spinal Device Manufacturer and Senior Executives that Allegedly Paid Kickbacks to Surgeons
In a complaint filed on July 22, 2019, the U.S. Attorney’s Office for the Southern District of New York (DOJ) intervened in a qui tam False Claims Act (FCA) suit against Life Spine Inc. (Life Spine), and senior executives of Life Spine. DOJ alleges that the company – a maker of spinal implants, devices and equipment – offered and paid kickbacks in the form of consulting fees, royalties, and intellectual property acquisition fees to surgeons to induce the use of its products in violation of the Anti-Kickback Statute (AKS). DOJ further alleges that Life Spine’s President and Chief Executive Officer (who is also its founder and majority shareholder), as well as its Vice President of Business Development, had knowledge of and participated in the alleged kickback arrangements, and named the individuals as co-defendants. DOJ claims that by paying the alleged kickbacks to physicians in order to induce the use of Life Spine products, Life Spine “caused false claims to be submitted to Medicare and Medicaid.”…
Continue Reading DOJ Intervenes in FCA Suit Against Spinal Device Manufacturer and Senior Executives that Allegedly Paid Kickbacks to Surgeons
OIG Advisory Opinion Allows PHO Network Hospitals to Give 100% Discount on Medigap-Covered Inpatient Deductibles, with Savings Shared as a Premium Credit to Patients
The Office of Inspector General (OIG), Health and Human Services, issued an Advisory Opinion allowing an arrangement between a licensed offeror of Medicare Supplemental Health Insurance policies (Medigap Offeror) and a preferred hospital organization (PHO) having network hospitals across the U.S. (the “Arrangement”). Under the Arrangement, the PHO’s network hospitals would provide discounts of up…
OIG Posts Telemedicine Advisory Opinion
The Office of Inspector General (OIG), Health and Human Services issued an Advisory Opinion allowing an arrangement proposed by a federally qualified health center look-alike (FQHC look-alike) to provide free technology items and services to a clinic run by a county Department of Health (County Clinic), that would facilitate telemedicine encounters (the Arrangement). Although the OIG found that the Arrangement could potentially implicate the anti-kickback statute (AKS), the OIG concluded that it would not impose administrative sanctions.…
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