FCA Legal News

Feds Bust a $1.2 Billion Medicare DME Scam Targeting Seniors

Earlier this week, the authorities announced charges against 24 people across the U.S., including doctors accused of writing bogus prescriptions for “durable medical equipment" (DME), such as unneeded back, shoulder, wrist, and knee braces. Others charged included owners of call centers, telemedicine firms, and medical equipment companies.

This is being called one of the largest health care fraud schemes investigated by the FBI and the U.S. Department of Health and Human Services Office of the Inspector General (HHS-OIG). According to allegations in court documents, some of the defendants obtained patients for the scheme by using an international call center that advertised to Medicare beneficiaries and “up-sold” the beneficiaries to get them to accept numerous “free or low-cost” DME braces, regardless of medical necessity. The international call center allegedly paid illegal kickbacks and bribes to telemedicine companies, doctors, or nurse practitioners, to obtain DME orders for these Medicare beneficiaries without ever even speaking to them. Finally, the orders were then sold to DME companies, who shipped out box after box of braces, fraudulently billed Medicare or other insurance programs for every item. People all over the country have been receiving boxes of braces they did not need or want. And often, they are responsible for a copayment on these items, for hundreds or even thousands of dollars! Collectively, the CEOs, COOs, executives, business owners and medical professionals involved in the conspiracy are accused of causing over $1 billion in loss to Medicare.

Thanks to the FBI, HHS-OIG, and the Department of Justice these criminals are facing indictments. But this is just the tip of the iceberg, as seniors all over the country are receiving unrequested and unnecessary DME from hundreds of providers, on orders written by hundreds of medical practitioners who have never interacted with the patients. Bracker & Marcus LLC has experience with these types of matters. If you or a loved one have received DME that you did not ask for and do not need, contact us for help.

SCOTUS discusses statute-of-limitations question in False Claims Act cases

The Supreme Court engaged in oral argument this week over an issue of the False Claims Act: how two separate statute-of-limitations provisions apply to False Claims Act actions when the federal government has not intervened in the relator’s qui tam suit.

Cochise Consultancy Inc. v. United States, ex rel. Hunt stems from a more recent period of U.S. military history — the deployment of U.S. forces in Afghanistan and Iraq. Whistleblower Billy Joe Hunt alleges that Cochise Consultancy and another defense contractor defrauded the federal government in a contract to clean up munitions left behind by Iraqi forces.

The law’s original statute of limitations requires lawsuits to be filed within six years of the alleged fraud. In 1986, Congress added a second statute of limitations, Section 3731(b)(2), which permits suits up to three years after “the official of the United States charged with responsibility to act in the circumstances” learns the “facts material to the right of action,” but not more than 10 years after the alleged fraud. Both statutes of limitations apply to a “civil action under section 3730,” and “whichever occurs last” controls the case.

Hunt’s FCA suit was filed in 2013, more than six years after the alleged fraud, which occurred in 2006 and 2007. Hunt argues that his case qualifies for Section 3731(b)(2)’s alternative statute of limitations because he filed suit less than three years after the relevant “official of the United States” learned of the alleged fraud in 2010. The defendants argue that a relator only receives the benefit of the “three year” rule if the Government intervenes.

If the federal government had intervened in Hunt’s suit, the alternative statute of limitations plainly would have applied. But the government did not intervene. The district court dismissed the suit as untimely, but the U.S. Court of Appeals for the 11th Circuit reversed, taking a position different from conflicting views in several other circuits. The 11th Circuit held that relators can invoke Section 3731(b)(2) in suits in which the United States is not a party and that Section 3731(b)(2)’s three-year limitations period does not begin until the government learns of the alleged fraud, regardless of when the relator discovers it.

The Supreme Court will now deliberate and issue a written opinion (hopefully) settling this question once and for all.

Puerto Rico Passes a False Claims Act

Puerto Rico will now have an additional weapon in its arsenal to combat hurricane contractors who defraud the island. Recently, Governor of Puerto Rico Ricardo Rosselló signed House Bill 1627, which establishes the Fraudulent Claims to Programs, Contracts, and Services of the Government of Puerto Rico Act.

By passing this bill, Puerto Rico will receive an additional $1.2 billion in federal funding which was conditioned upon taking affirmative steps to supervise and prosecute those who misuse Medicaid.

The secretary of the Puerto Rico Department of Health, Rafael Rodríguez, welcomed the new law by stating that it “will allow the Government to continue to recover credibility at the federal level, to process more aggressively those who misuse these funds and ensure that the funds allocated are available to better meet the needs of bona fide beneficiaries.”

With this law, Puerto Rico joins 30 U.S. states that have fraudulent claim laws. By having its own False Claims Act, in addition to bringing claims specific to the island, Puerto Rico will be able to participate and recover funds from nationwide settlements. Whistleblowers who report the fraudulent use of Government funds will also be protected by this Act.

Bracker & Marcus LLC represents relators in False Claims Act cases across the country (and wouldn't mind having a reason to travel to Puerto Rico). If you are aware of any fraud, waste, or abuse of federal, state, or now U.S. territory funds, please contact us for a free initial consultation.

DoJ Publishes 2017 False Claims Act Statistics

Nearly $3.5 billion in proceeds that was brought in last year from False Claims Act cases filed by whistleblowers. Some of the interesting stats are below:

  • 675 Qui Tam Cases Filed in 2017
  • $3,443,153,343.00 in total qui tam recoveries for both intervened and non-intervened cases
  • $334,906,856 in Relator's Share awards for intervened cases
  • $59,581,593.00 in Relator's Share awards for non-intervened cases

The full report can be found here.