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Whistleblower News: Medicare Billing Fraud, CFTC Awards

by HB Whistleblower Legal Team


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Company Pays Federal Officials $8 Million to Settle Probe of SC Children's Autism Therapy

The state's largest provider of children's autism behavioral therapy has paid the federal government $8.8 million to settle a false claims probe, federal prosecutors have announced.

An official with Early Autism Project Inc. issued a statement Thursday that said the firm had agreed to pay the money "to allow us to continue our focus on providing life-changing applied behavior analysis therapy to children with autism spectrum and related disorders."

"We admit no wrongdoing and the corporate integrity agreement with the government clearly states that the terms apply to Early Autism Project only," said Sarah Vega, senior vice president of operations for Early Autism Project, in the statement.

The settlement resolves allegations that EAP billed a military insurance program, TRICARE, and South Carolina’s Medicaid program for ABA therapy services for children with autism that either misrepresented the services provided or where the services were not provided at all, federal prosecutors said.

An EAP-devised program, prosecutors alleged, was designed to maximize profits by billing Medicaid for administrative and management functions of the company. Medicaid does not pay for therapy services by individuals who are not actively working with the child for whom the therapy is billed. read more »

CFTC's Whistleblower Awards Total More than $45 Million

The CFTC has handed out more than $45 million in multiple whistleblower awards, reflecting the higher volumes and greater complexity of incoming whistleblower submissions, officials say.

In fact, the regulator last month acknowledged “an award of approximately $30 million to one whistleblower and the first award was made by the program to a whistleblower living in a foreign country,” officials say.

The whistleblower program is mandated by Section 748 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. “Whistleblowers are eligible to receive between 10 and 30 percent of the monetary sanctions collected. The CFTC can pay awards not only on CFTC enforcement actions, but also related actions brought by foreign futures authorities if certain conditions are met,” officials say. read more »

Defense Contractor 3M Settles Defective Earplug Lawsuit at $9.1 Million, $1.9 Mill to Whistleblower

According to the complaint, 3M knew that its Combat Arms Earplugs Version 2 (CAEv2), were not long enough for proper insertion into the ears of users, and it, nevertheless, sold the product to the Defense Logistics Agency.

CAEv2 earplugs have two different positions. They can be used alternatively as traditional earplugs and flipped over for muffling explosion noise, while letting quiet sounds go through them. While 3M’s engineers allegedly knew the earplugs could lose their seal, which would affect performance, the company did not share that information with the government. Tellingly, CAEv2 plugs are now discontinued.

3M earplug malfunction may have caused thousands of U.S. soldiers to suffer tinnitus and related conditions. Thus, the government may not only have endured losses through the purchasing of  defective products, but also through the treatment of ailments related to CAEv2 use.

For the director of the U.S. Army’s Fraud Unit, Frank Robey, the settlement will serve as a cautionary tale for would-be fraudsters. "Properly made safety equipment, for use by our soldiers, is vital to our military's readiness. Our agents will respond robustly to protect the safety of our military," he commented. read more »

U.S. settles with Detroit hospital over alleged illegal patient referrals

A regional Detroit-based hospital has reached a settlement with the federal government over allegations the hospital promised free or below fair market value office space and staff to physicians in exchange for referrals.

The U.S. Department of Justice (DOJ) alleges between 2004 and 2012 William Beaumont Hospital violated the Anti-Kickback Statue and the False Claims Act by submitting false claims for patients that came from referring physicians that the hospital had improper relationships with. 

“Offering financial incentives to physicians in return for patient referrals undermines the integrity of our health care system,” DOJ Civil Division acting assistant attorney general Chad Readler said in a statement. “Patients deserve the unfettered, independent judgment of their health care professionals.”

"This result should impress on the medical community that we will aggressively take action to recover monies wrongfully billed to Medicare, through the remedies provided in the federal False Claims Act,” added Eastern District of Michigan U.S. attorney Matthew Schneider. read more »

Grenada Lake Medical Center to pay more than $1.1 million to resolve False Claims Act allegations involving medically unnecessary psychotherapy services

The Justice Department announced today that Grenada Lakes Medical Center (GLMC), a publicly owned hospital which at various times has been operated by the University of Mississippi Medical Center and by the Grenada Lake Medical Center Board of Trustees, has agreed to pay more than $1.1 million to resolve False Claims Act allegations that the hospital sought and received reimbursement from Medicare for services that were not medically reasonable or necessary. 

The settlement resolves allegations that, beginning in January 2005 and continuing until April 2013, the hospital submitted claims for intensive outpatient psychotherapy (IOP) services that did not qualify for Medicare reimbursement. The IOP services in question were performed on GLMC’s behalf by Allegiance Health Management (Allegiance), a postacute health-care management company based in Shreveport, Louisiana, but billed to Medicare by GLMC directly.

“Hospitals that participate in the Medicare program are responsible for ensuring that the services performed at their facilities or on their behalf reflect the medical needs of patients rather than the desire to maximize profit,” said Acting Assistant Attorney General Chad A. Readler for the Civil Division. read more »