Hagens Berman Blog

Whistleblower News: Healthcare Fraud, SEC Rewards

by HB Whistleblower Legal Team

08/06/2018

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Lumberton business, owners ordered to pay nearly $3 million to government

A federal judge entered a nearly $3 million judgment against Compassionate Home Care Services Inc. of Lumberton, the owner and her son after finding they had fraudulently billed Medicaid for bogus services.

Also named in the judgment entered Wednesday are owner Carol Anders, of Fairmont, and her son, Ryan Santiago, of Lumberton, according to a release from of the office of the U.S. Attorney for the Eastern District of North Carolina.

Evidence showed that between 2008 and 2013, Compassionate Home Care Services Inc. filed fraudulent claims totaling $585,082.73 with the N.C. Medicaid program as well as claims for services that were never provided, the release stated.

Anders, who was responsible for the day-to-day operations, was responsible for the false Medicaid billings, the release said. read more »

Kansas oncologist subject of federal Medicare fraud suit for unnecessary treatments

The federal government plans to sue a Kansas oncologist for allegedly submitting fraudulent claims to government insurers — including Medicare, Medicaid and TRICARE — for cancer treatments that were medically unnecessary.

Mark Fesen, who was the subject of an investigation four years ago by The Wichita Eagle, worked for the Hutchinson Clinic from 1993 to 2011, until he left to work for Central Care Cancer Center, which has offices across the state. The center’s website says Fesen currently works at its offices in Wichita and Great Bend.

A whistleblower lawsuit was filed by Frank Tra, a former clinical oncology pharmacist at the Hutchinson Clinic, in 2014. Some of those court documents were recently unsealed at the request of U.S. Attorney Stephen McCallister, whose office plans to file its own lawsuit within 90 days, court documents say. read more »

The Rules around Whistleblowing Are Changing. Are You Prepared?

The United States Supreme Court recently narrowed legal protections for corporate whistleblowers at publicly traded companies. In a unanimous ruling in Digital Realty Trust, Inc. v. Somers, it found that only those individuals who report a securities law violation directly to the Securities and Exchange Commission (SEC) are protected by the anti-retaliation provision under the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act.

The court’s decision, often viewed as a win for employers, is a reminder that companies must remain vigilant as dynamics in the professional sector shift. read more »

Hospital chain to pay $65M to settle Medicare fraud claims

The nation’s fifth-largest hospital chain has agreed to pay the federal government $65 million to settle a long-running whistleblower lawsuit accusing its founder of pressuring staff to admit patients who did not need inpatient care.

Federal prosecutors on Friday announced the settlement with Prime Healthcare Services, company founder and CEO Prem Reddy and 14 hospitals operated by Prime Healthcare in California.

Prosecutors in the Central District of California in Los Angeles intervened in the lawsuit in 2016. Prime Healthcare Services owns more than 40 hospitals across the nation, including recently acquired Southern Regional Medical Center in Clayton County, Georgia.

The agreement requires that Reddy personally pay $3.25 million of the $65 million settlement, Wilbanks said.

The suit—filed by a nurse supervisor at a San Diego hospital Prime Healthcare acquired in 2010—alleged that Reddy instituted a corporate practice of pressuring the chain’s emergency room physicians and hospital administrators to artificially boost inpatient admissions by ordering medically unnecessary admissions of patients who should have been placed under observation, treated as outpatients or discharged. read more »

SEC Whistleblower Payouts Slow Amid Deluge of Reward Seekers

Wall Street’s top regulator now takes more than two years to hand rewards to tipsters who report wrongdoing, a process that lasts longer than the average time it takes to investigate and close an enforcement case.

The Securities and Exchange Commission has become a magnet for tips—both good and bad—after publicizing its mega-bounties, including an $82 million award given in March to three tipsters who told regulators about a complex scheme at Bank of America Corp. involving misused customer cash and securities.

The commission acknowledges the process can be improved, and partly blames requests from unworthy applicants trying to finagle windfalls from the program, which pays whistleblowers who provide tips deemed critical to an investigation.

The cash-for-tips program, now in its seventh year, has awarded more than $266 million to 55 tipsters, the SEC said. read more »