Settlements Paid Under the False Claim Act
Reporting fraud results in high-figure settlements because of the devastating consequences of deceit. Below are recent illustrations of some of these settlements involving companies committing fraud:
Tenet Healthcare paid the federal government $900 million for billing violations In July 2006. The violations included manipulation of outlier payments to Medicare, kickbacks, upcoding and bill padding.
Off-label marketing to nursing homes of the drug Zyprexa to treat dementia resulted in Eli Lilly paying $1.4 billion to settle fraud charges in January 2009. Zyprexa is not intended for dementia treatment. Of the $1.4 billion settlement, $800 million was paid under the False Claims Act, while the remaining amount paid the criminal penalties.
Recently in October 2010, GlaxoSmithKline paid $600 million settling a case of systematic deceit involving product contamination and dosage irregularities at one of the company's plants in Puerto Rico. Medications involved:
Due to fraudulent billing for pre-schools and other schools' speech, physical and occupational therapy, psychological counseling and transportation over a seven-year period, New York State and New York City paid $540 million in July of 2009.
Due to their off-label marketing of Seroquel, an anti-psychotic medication, AstraZeneca agreed to pay a $520 million settlement.
In September 2008, Cephalon agreed to a $375 million settlement due to off-label marketing of the narcotic lollipop, Actiq (“fentanyl citrate”); an epilepsy drug, Gabitril; and a narcolepsy medication, Provigil.
In a settlement for seven qui tam cases involving pricing, promotional activities, kickbacks to physicians and 50 different medications, Bristol-Myers Squibb paid $328 million under the False Claims Act. Thirteen of the 50 medications accounted for 69% of the company's pharmaceutical revenue in 2007. Medications involved in the qui tam settlement:
U.S. taxpayers paid for serious malfunctions and expensive fixes in spy satellites with defective parts manufactured by TRW, which is now owned by Northrup Grumman. The company agreed to pay $325 million in April 2009.
Even though damages were estimated at $630 to $700 million, St. Barnabas Hospitals' ability to pay was below that amount, so in June 2006, they agreed to pay $265 million. Outlier Medicare payments can be claimed by a hospital for particularly difficult or complex procedures. While the national average for inpatient Medicare revenue for outlier Medicare payments is 4.75%, it accounted for 41% of St. Barnabas'.
Our firm is only investigating claims in which a business entity, such as
a company or medical practice, is submitting false claims to a governmental
entity. We do not handle cases involving individuals receiving government
benefits under false pretenses. (For example, we do not handle claims in
which a person falsely claims a disability in order to receive government
benefits.) For these types of claims, you should contact the appropriate
government agency directly, such as Medicaid, and report the fraud. IRS Tax
Fraud must exceed $2 Million.
