Top Healthcare Fraud Cases

The US Government spends nearly $700 billion each year on Medicare and Medicaid with some of this expenditure due to acts of fraud. More and more, honest citizens are filing claims and fighting fraud, accounting for approximately one of every three dollars recovered through false claims cases.

WellCare to Pay $80 Million

WellCare Health Plans has agreed to pay $80 million to settle charges the company inflated Medicaid charges in Florida. The settlement applies only to Florida, and does not settle any other state or federal investigations of WellCare. | May 5, 2009

Quest Diagnostics to Pay $302 Million

Quest Diagnostics has agreed to pay $302 million to settle civil and criminal charges related to a Quest subsidiary which sold a parathyroid hormone immunoassay test which reported elevated results. The inaccurate diagnostic test kit resulted in medical providers submitting false claims for reimbursement to federal health programs. The settlement includes $262 million paid under the federal False Claims Act, $6.2 million paid to the states, and a criminal fine of $40 million. Thomas Cantor, founder, president and owner of Scantibodies Laboratory Inc., filed the whistleblower lawsuit, and will receive approximately $45 million for his work, and the work of his attorneys, in bringing the case. | April 14, 2009

Lilly Pays Record $1.4 Billion for Zyprexa Fraud

In the largest single settlement with a False Claims Act component, Eli Lilly has agreed to pay $1.4 billion to settle charges it defrauded Medicare and Medicaid by off-label marketing of Zyprexa. The drug was promoted to nursing homes to treat dementia, which it does not do. Of the $1.4 billion settlement, $800 million was paid under the False Claims Act, and $615 million was a criminal penalty (a $515 million fine and asset forfeiture of $100 million). | January 10, 2009

Bayer Healthcare to Pay U.S. $97.5 Million

Bayer HealthCare has agreed to pay the United States over $97.5 million to settle allegations it paid kickbacks to several diabetic suppliers, causing those suppliers to submit false claims to Medicare. The cash-for-patient scheme involved 11 diabetic supply companies which were paid kickbacks to convert their patients from other suppliers to Bayer products. | November 25, 2008

Home Health Care Fraud in FL

In October, Medicare suspended millions of dollars in payments to the top 10 home healthcare agencies in Miami after discovering that since 2001 Medicare''s payments for home healthcare in Dade County had grown by a whopping 1,750 percent - to $1.3 billion - while the pool of people over age 65 diagnosed with diabetes had grown by just 30 percent. To put it another way, Medicare''s payments for home healthcare in Miami-Dade grew at a pace 13 times the national rate. Medicare officials say that right now about one in every 15 Medicare dollars spent on home healthcare in the U.S. is spent in Miami-Dade County alone. | Nov. 21, 2008

Cephalon Pays $425 Million

Cephalon, a biotech company, has settled a massive off-label marketing case for $425 million. The case involved off-label marketing of Actiq (a narcotic lollipop designed for pain control in cancer patients), Gabitril (an epilepsy medication) and Provigil (a narcolepsy medication). Of the $425 million settlement, $50 million is a criminal fine and $375 million is to be paid as part of a civil settlement of Medicare and Medicaid claims under the False Claims Act. The massive fraud was first brought to the government''s attention by four whistleblowers, all of whom will share in the proceeds of the recovery.

As part of Cephalon''s Corporate Integrity Agreement, the company will have to post on its website a searchable database of all physicians who acted as speakers or consulted for the company during 2009. Beginning the first quarter of 2011, Cephalon will have to name doctors who received any payments from the company during the previous calendar year and say (roughly) how much they received.| October 1, 2008

NY Hospital to pay $88 Million

Staten Island University Hospital (SIUH) has agreed to pay the United States and the state of New York over $88.9 million to settle claims the hospital defrauded Medicare, Medicaid and the military's health insurance program. This is the third time SIUH has been nailed for fraud. Previous cases were settled for $45 million (1999) and $76.5 million (2005). | September 17, 2008

Abbott Pays $28 Million to Texas

Abbott Laboratories has agreed to pay $28 million to settle Medicaid-fraud charges under the Texas False Claims Act. Abbott misreported drug prices to Medicaid, causing the state to significantly overpay for prescription drugs. The Texas case was brought by Ven-a-Care of the Florida Keys, which has previously won False Claims Act cases against Schering-Plough/Warrick Pharmaceuticals, Dey, Boehringer Ingelheim/Roxane Laboratories, Baxter Healthcare Corp., and Fresenius. The U.S. Department of Justice has joined a similar case, also against Abbott, brought by Ven-a-Care. | September 17, 2008

Healthfirst to Pay New York $35 Million

Healthfirst, the largest Medicaid Managed Care provider in New York, will pay $35 million to settle allegations it violated state and federal contracts by paying bonuses to employees based on the number of people they enrolled in managed care. | September 17, 2008

CoxHealth to Pay $60 Million

CoxHealth has agreed to pay more than $60 million to settle a False Claims Act lawsuit in which the company was charged with overbilling Medicare. CoxHealth actually stole more money than they are being required to return to the U.S. Government because as federal agents began calculating the damages, it soon became clear Cox could not pay without going under. | Aug. 6, 2008

Walgreens Pays $35 Million

Walgreens is the third national pharmacy chain to settle drug switching allegations exposed by a whistle blowing pharmacist whose actions have helped return more than $120 million to federal and state governments. Current charges involve Walgreens'' switching dosage forms in filling generic Prozac, Zantac and Eldepryl prescriptions paid for by Medicaid. | June 4, 2008

Medtronic/ Kyphon Settle for $75 Million

Medtronic Spine, formerly known as Kyphon Inc., has agreed to pay $75 million to settle a False Claims Act lawsuit which exposed the company''s sales and pricing strategy which was designed to further fraud against Medicare. The case was filed by whistleblowers Craig Patrick and Chuck Bate, who will receive $14.9 million of the settlement as an award for helping uncover and prosecute the fraud on behalf of the American government and its taxpayers. | May 28, 2008

Biovail to Pay $25 Million

Biovail Corporation says it will pay $25 million to settle criminal allegations related to kickbacks paid to doctors in order to induce them to prescribe Cardizem. The probe began after reports in The Wall Street Journal and Barron''s revealed Biovail was paying doctors up to $1,000 each to write prescriptions for Cardizem LA and write reports on the drug - a kind of Phase IV marketing scam. | May 20, 2008

$215 Million Alabama Jury Award Sends Message on Average Wholesale Price Fraud

AstraZeneca was hit with a $215 million judgment in Alabama over Medicaid drug pricing fraud. The jury said AstraZeneca must pay $40 million in compensatory damages and $175 million in punitive damages for alleged false and misleading reporting of drug prices reimbursed by the Alabama State Medicaid Agency. Remember, this is just one drug company in one state. If we scale up the compensatory award alone, based on population, AstraZeneca seems to face a potential liability of $2.4 billion for Average Wholesale Price and Medicaid Best Price violations. AstraZeneca is just one of more than 75 drug companies in line to face similar charges in Alabama. Though the Alabama litigation is not a False Claims Act case, more than 60 companies face similar charges, under the federal False Claims Act, up in Boston. These companies include: Abbott, Roxane, Dey, Boehringer Ingelheim, Amgen, Armour Pharmaceutical, Aventis Pharmaceuticals, Baxter Healthcare, Bedford Laboratories, Ben Venue Laboratories, Braun of America, C.H. Boehringer Sohn, Centocorps Inc., Forest Pharmaceuticals, Grundstucksverwaltung GMBH & Co., EMD, Geneva Pharmaceuticals, GlaxoSmithKline, Glaxo Wellcome, Burroughs Wellcome, Hoechst Marion Roussell, Hoffman-LaRoche, Hospira Inc., Immunex, Ivax Pharmaceuticals, Janssen Pharmaceutical Products, Johnson & Johnson, Lipha, McGaw, Merck, Mylan Laboratories, Mylan Pharmaceuticals, Novartis, Ortho Biotech Products, Pfizer, Pharmacia, Pharma Investment, PurePac Pharmaceutical, Roche Laboratories, Roxane Laboratories, Sandoz, Sicor, Gensia Pharmaceuticals, Schering-Plough Corp., SmithKline Beecham Corp., GlaxoSmithKline, Teva Pharmaceuticals, Warrick Pharmaceuticals, and Z.L.B. Behring, among others. | February 25, 2008

HealthSouth Pays $14.9 Million

HealthSouth and two doctors have agreed to pay $14.9 million ($14.2 million to be paid by the company and $700,000 to be paid by the two doctors) to settle charges the company was submitting false claims to Medicare and paying illegal kickbacks to referring physicians. The settlement results from disclosures made by HealthSouth in 2004 and 2005 to the U.S. Attorney for the Northern District of Alabama. | Dec. 18, 2007

Bristol-Myers Squibb to Pay $515 Million

Bristol-Myers Squibb has agreed to pay $515 million to settle allegations brought in seven qui tam cases (six in Boston and one in Florida) involved pricing and promotional activities (including kickbacks to doctors) for more than 50 drugs, including 13 drugs with a combined 2007 sales of $10.7 billion - a total of 69 percent of Bristol-Myers'' 2007 pharmaceutical revenue. Drugs included in this settlement include the blood thinner Plavix, antipsychotic Abilify, the cholesterol treatment Pravachol, the cancer therapy Taxol, and the antidepressant, Serzone. Of the $515 million, approximately $328 million will be paid under the Federal False Claims Act, with the state''s getting a total of $187 million. | Sept. 28, 2007

Artificial Hip and Knee Joint Companies to Pay $310 Million to Settle Kickback Charges

Five orthotics companies, which account for nearly 95 percent of the hip and knee surgical implants sold in the United States, have agreed to pay $310 million in order to avoid criminal prosecution for paying kickbacks to surgeons in order to get them to choose their products. | Sept. 26, 2007

$634 Million False Claims Act Settlement for OxyContin

Purdue Frederick Co. and three of its executives have pled guilty to misbranding prescription painkiller OxyContin and will pay more than $634.5 million, including a $276 million criminal fine, $160 under federal and state false claims acts, and $130 million to settle private civil claims.

In announcing the settlement, U.S. Attorney John Brownlee of the Western District of Virginia, noted that "In the process [of illegally marketing the drug], scores died... and an even greater number became addicted." | May 15, 2007

A Record $334 Million False Claims Act Judgment

Amerigroup was found liable, in a trial by jury, in a False Claims Act case in which the company was accused of discriminating against pregnant women who were supposed to be recruited into a state-sponsored Medicaid HMO. Losing the case triggered automatic triple damages of $144 million. An additional $190 million in statutory fines were levied by U.S. District Judge Harry Leinenweber who noted that Amerigroup "pilfered money from Medicaid coffers to pad its own pockets." The Amerigroup case, was brought by whistleblower Cleveland A. Tyson and was joined by both the U.S. Department of Justice and the Illinois Attorney General''s office. | March 14, 2007

This information is for educational purposes. It is not offered as and does not constitute legal advice or legal opinions. You should not act or rely upon this information without seeking the advice of an attorney.


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