20 Largest False Claims Cases of 2010

Here are the 20 biggest false claims investigations and lawsuits of 2010.

1. Pharmaceutical giant GlaxoSmithKline, based in Research Triangle Park, N.C., in October agreed to pay $750 million to settle allegations that it manufactured and sold contaminated drugs to Medicaid and other government health programs. The Food, Drug and Cosmetic Act prohibits the introduction of any contaminated or adulterated drugs into the market. Many of GSK's drugs were deemed adulterated in many ways. The resolution includes a criminal fine and forfeiture totaling $150 million and a civil settlement under the False Claims Act and related state claims for $600 million.

2. In September, Allergan, a pharmaceutical company based in Irvine, Calif., agreed to pay $600 million for promoting its pharmaceutical drug Botox for uses not approved by the FDA, paying kickbacks to physicians and other violations of the False Claims Act. Allergan has agreed to pay $375 million in criminal penalties for misbranding Botox and another $225 million to resolve claims that its unlawful marketing practices caused false claims to be submitted to government healthcare programs such as Medicare and Medicaid.

3. Pharmaceutical manufacturer AstraZeneca, based in Wilmington, Del., agreed in April to pay $520 million to settle allegations that it had illegally marketed its antipsychotic drug Seroquel, causing false claims to be submitted. The company had been accused of marketing Seroquel as off-label treatment for insomnia and psychiatric conditions as well as paying kickbacks to physicians.

4. Novartis Pharmaceuticals, based in East Hanover, N.J., agreed in September to pay $422.5 million to settle allegations that it had illegally marketed its pharmaceutical drug Trileptal, filed false claims and paid illegal kickbacks to healthcare professionals, inducing them to prescribe Trileptal and the five other drugs. Novartis allegedly illegally promoted the drug Trileptal for "off-label" treatment of psychiatric, pain and other conditions, even though the FDA has only approved it as an anti-epileptic drug for the treatment of partial seizures.

5. Forest Pharmaceuticals, based in St. Louis, agreed in September to pay more than $313 million to settle allegations of paying illegal kickbacks in the form of expensive meals, entertainment and cash payments disguised as grants or consulting fees to physicians prescribing its anti-depressant drugs Celexa and Lexapro. The company has also agreed to settle pending False Claim allegations that false claims were submitted to federal healthcare programs for Levothroid, Celexa and Lexapro.

6. In May, The Health Alliance of Greater Cincinnati and The Christ Hospital in Mount Auburn, Ohio, agreed to pay $108 million to settle claims they violated the Anti-Kickback Statute and the False Claims Act. The organizations were accused of illegally paying physicians in exchange for referring cardiac patients to The Christ Hospital, a former member hospital of the Health Alliance of Greater Cincinnati.

7.
Amgad Hessein, MD, a pain management physician and anesthesiologist from Newark, N.J., was arrested in November on charges he had submitted approximately $52 million in false claims to Medicare and private insurers. Dr. Hessein, who practiced at Advanced Pain Management Specialists allegedly conspired with his brother Ashraf Sami, officer manager at Advanced Pain Management Specialists, to submit the false claims.

8. In August, Cranbury, N.J.-based Kos Pharmaceuticals agreed to pay more than $41 million to settle allegations that the pharmaceutical company violated anti-kickback laws and promoted off-label use of its cholesterol treatment drugs Advicor and Niaspan. The company was accused of falsely marketing the off-label use of Advicor as a first-line therapy for cholesterol treatment, even though it was only approved by the FDA as a second-line therapy.

9. In July, Teva Pharmaceuticals has agreed to pay $27 million to settle allegations of Medicaid fraud revealed by a whistleblower, claiming the company violated the Florida False Claims Act by allegedly inflating the prices of various medications distributed by pharmacies and other providers reimbursed by the state Medicaid program. This led to the overpayment of millions of dollars in pharmacy reimbursements.

10. Walter Janke, MD, a retired cardiovascular surgeon from Vero Beach, Fla., and his wife agreed in November to pay $22.6 million to settle allegations they had violated the False Claims Act. Dr. Janke and Mrs. Janke were owners of America's Health Choice Medical Plans, a Medicare Advantage organization for Medicare beneficiaries, and Medical Resources, a primary care provider. The couple allegedly submitted false diagnostic codes to Medicare in attempts to yield greater payments from the federal healthcare program.

11. Pharmaceutical company Schwarz Pharma, headquartered in Chicago, agreed in April to pay $22 million to resolve allegations it failed to advise the Centers for Medicare and Medicaid Services that two of its drugs did not quality for coverage under the federal healthcare programs. Schwarz allegedly submitted false claims to the programs for the unapproved drugs and also allegedly submitted false quarterly reports to the government that allegedly misrepresented the drugs' regulatory status.

12. In November, St. Joseph Medical Center in Towson, Md., agreed to pay the United States $22 million to settle allegations under the False Claims Act that it paid kickbacks and violated the Stark Law when it entered into a professional services contract with MidAtlantic Cardiovascular Associates.

13. Sushil Sheth, MD, a former cardiologist from Burr Ridge, Ill., who was sentenced last month to five years in prison and restitution payment for defrauding public and private health insurers, agreed in September to pay $20 million to settle allegations of fraudulent billing in a separate False Claims Act lawsuit.

14. In November, Ameritox, a drug-testing company based in Midland, Texas, agreed to pay $16.3 million to settle a false claims lawsuit accusing the company of paying kickbacks to physicians. The settlement is the result of a whistleblower lawsuit filed by a former Ameritox senior sale representative Debra Maul.

15. In December, St. John's Mercy Health Care and St. John's Health System, both based in St. Louis, agreed to pay $2.2 million to settle allegations that foot clinics at St. John's hospitals overbilled Medicare. St. John's Hospital and five other hospitals allegedly billed Medicare for podiatry services, such as toenail trimmings and callus removals, that were done by nurses and other hospital employees who were not licensed physicians. Medicare does not typically pay for such podiatry services, and federal investigators claimed the provided services were not medically necessary.

16. Robert Wood Johnson University Hospital Hamilton (N.J.) agreed in March to a $6.35 million settlement to resolve allegations that it inflated charges to Medicare patients to obtain higher reimbursements from the federal program. Two whistleblower lawsuits against the Hamilton hospital alleged it inflated charges to obtain supplemental outlier payments for cases that were not overly costly and that should not have been eligible for outlier payments. The federal government intervened in the lawsuits in Jan. 2008.

17. Simi Valley (Calif.) Hospital
agreed in November to pay the U.S. government $5.15 million in order to settle allegations that the hospital filed fraudulent claims to Medicare. The whistleblower lawsuit, filed by a former hospital employee, accused the hospital of fraudulently billing Medicare and Medi-Cal between 1991-1997 for psychiatric services rendered to ineligible patients. Simi Valley also allegedly paid a medical director $12,000 each month to work on a nonexistent program.

18. In November, Dey, a Basking Ridge, N.J.-based pharmaceutical company, agreed to pay the state $3.5 million to settle allegations it reported inflated average wholesale prices of its drugs. Dey published significantly inflated AWPs for its drugs Albuterol, cromolyn sodium, ipratropium bromide and other inhalation drugs used to treat asthma and chronic obstructive pulmonary disease. At times the AWPs were inflated by 1,200 percent.

19. Lawrence Jaeger, DO, owner of two New York City dermatology clinics Community Medical and Dermatology Center and Advanced Dermatology of New York agreed in June to pay $2.75 million to settle allegations that he and his businesses submitted false claims to Medicare and the New York Medicaid program.

20. In November, Mylan agreed to pay more than $2.6 million to settle the allegations it reported inflated prices of its drugs. Massachusetts filed a False Claims Act lawsuit against pharmaceutical giant, accusing the company of reporting inflated prices to drug price-reporting services and causing the Massachusetts Medicaid program to pay inflated prices for Medicaid beneficiaries' prescription.

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