FCA Settlement News

Compound Pharmacy Agrees to $365,000 Settlement of False Claims Act Lawsuit

Bracker & Marcus LLC is pleased to announce that the U.S. Attorney’s Office for the Middle District of Georgia has reached an intervened “ability-to-pay” settlement with defendant Lake Country Pharmacy & Compounding Center and its owners in the amount of $365,000 plus interest. Lake Country will also be subject to a Corporate Integrity Agreement to ensure that it operates on the straight and narrow moving forward. Our client (who wishes to avoid media coverage) will receive a 20% relator’s share of the Government’s recovery.

In his qui tam complaint, our client alleged that Lake Country, an independent pharmacy in Greensboro, Georgia, was improperly billing Medicare, TRICARE, and Medicaid for compounded drugs made with expensive tablets, when in fact the drugs were made using cheap bulk powders that were not eligible for reimbursement. When he learned that this was improper while watching a seminar on ethical practices in compound pharmacies, he immediately reported his concerns to the owners, which resulted in him being fired and asked to leave the premises. (Our client’s claim of retaliation under the False Claims Act has also been settled.) In short order, he found our co-counsel, prominent Athens-area employment lawyer John Beasley, and together we filed a qui tam lawsuit. The United States found over $2.2 million in potential damages.

In addition to being an upstanding citizen, our client is a veteran of the United States Marine Corps. We are proud to have represented him in this action and congratulate him on having come forward and reported this matter to the Government. He knew from the start that this was not likely to be a large recovery, but his only concern was righting a wrong and protecting patients, and his integrity compelled him to be a whistleblower.

We also congratulate Assistant U.S. Attorney Todd Swanson and investigator Shakethia Morgan for a successful investigation and settlement.

Beaumont Hospital to Settle False Claims Act Case for $84.5 Million

The United States Department of Justice and U.S. Attorney for the Eastern District of Michigan has announced a settlement with William Beaumont Hospital of $84.5 million to resolve a False Claims Act lawsuit brought by our client, David Felten, M.D., Ph.D.

False Claims Act whistleblower David Felten, M.D., Ph.D.

False Claims Act whistleblower David Felten, M.D., Ph.D.

Surely one of the most prestigious whistleblowers in FCA history, Dr. Felten was recently listed among the “Thirty Most Influential Neuroscientists Alive Today.” Among many other honors, Dr. Felten is the lead author for Netter's Atlas of Neuroscience, and recipient of a MacArthur Genius Grant and two 10-year research MERIT Awards from two different National Institutes of Health. He is widely credited with creating the field of psychoneuroimmunology.

Bracker & Marcus LLC and Caplan Cobb LLP are proud to represent Dr. Felten and congratulate him, the federal government (in particular AUSAs Peter Caplan, Leslie Wizner, and Carolyn Bell-Harbin, lead investigator Jonathan Sonbay, and DOJ attorney Laurie Oberembt), and the state of Michigan for this outstanding result. In addition to the qui tam settlement, our firms continue to litigate a False Claims Act retaliation claim on his behalf. The case is captioned United States ex rel. Felten v. William Beaumont Hospitals, 2:10-cv-13440 (E.D. Mich.).

For more information on the case and settlement, please see our press release.

Relator Herretta Pickens Speaks Out on her Decision to File an FCA Suit

Last month, we announced a settlement with the Southern Spine & Pain Institute in a False Claims Act case brought by former employees Herretta Pickens and Teresa Williams. Ms. Pickens was a nurse practitioner at Southern Spine; she believed it was her calling to provide relief to those in pain. I asked Ms. Pickens, now that it was all over, why she decided to file a False Claims Act case in the first place. Here is what she said:

I started [down] this path because my patients wanted to be heard and needed a voice. Alone I was not much help, but with support from Teresa, and then you [Jason Marcus], Oscar [Prioleau], and Julie [Bracker], we made those voices heard.
During the process I further realized the enormous associated risks and threats to individuals who are economically challenged and/or uneducated. I now work harder than ever to be compassionate and empathetic with my patients. I do correctional medicine now and use this incident as a platform to help those with substance abuse issues and addiction to pain pills. I also have spoken [at] pain management education seminars put on by my peers. As difficult as this has been, it has been rewarding and taught me much. I hope this experience will make me a better provider.

Ms. Pickens chose a career in the medical profession to help people and, like many of our clients, came to us for that same purpose. Moreso than any other area of False Claims Act liability, Medicare and Medicaid fraud results in harm to the public, as patients face the prospects of unnecessary procedures, insufficient care, and exhausting of their insurance benefits. Healthcare fraud targets the sick and the infirm, the members of our society most in need of our attention and care, and we are thankful for practitioners like Herretta Pickens, who put their patients' well-being ahead of all else.

Southern Spine & Pain Institute Settles False Claims Act Suit for $430,000

Relators to receive 19.5% share of recovery.

"When physicians bill the government for medical services that are not needed by the patient, they violate the trust placed in them by their patients and the government to provide only medically necessary care."
U.S. Attorney John Horn

Bracker & Marcus LLC is pleased to announce that the United States and State of Georgia have settled allegations of wrongdoing by Southern Pain Institute, P.C, and its owner, Dr. Anthony Clavo. SPI operated three medical offices in the Atlanta area, as well as an ambulatory surgical center and pharmacy, treating patients with pain and related disorders. The United States and the State intervened and settled allegations that SPI submitted claims for services that were not medically necessary and where there was insufficient information in the medical records to support procedures performed and billed to Medicare and Medicaid.

"Delivering medically unnecessary treatment or failing to document the need for that care can be a serious threat to the health of the patient as well as the federal programs they depend upon."
HHS OIG SAC Derrick L. Jackson

Two brave women reported SPI in a qui tam action, after choosing to resign from the practice rather than participate in the fraud. Both had serious concerns that patients were being put in harm's way. Herretta Pickens was Dr. Clavo's nurse practitioner. She discovered that SPI had not maintained the medical records necessary to properly treat her patients and formed a belief that patients were being subjected to unnecessary procedures. Teresa Williams was a front office administrator, and she too harbored concerns that patients were being scheduled for procedures that they did not need. Things got so bad that in a single 24-hour period in March of 2015, they both quit, in response to separate incidents, without having had any prior discussion about doing so or bringing an FCA action together. Just a few months later, in July 2015, the two whistleblowers found each other, and Bracker & Marcus LLC filed a False Claims Act case on their behalf.

"Fighting Medicaid fraud has been and will remain a top priority for our office. People who misuse our medical systems divert funds from those in need of care and abuse Georgia taxpayer dollars."
Georgia Attorney General Chris Carr

Attorney Jason Marcus spent his days working directly with federal and state investigators, attorneys, and agents, digging through medical records and building a robust case against SPI. Before the investigation could be completed, both SPI and Dr. Clavo filed for bankruptcy, and the medical practice was closed. SPI soon thereafter settled the claims against it for $430,000 plus interest. Ms. Pickens and Ms. Williams will split a relator's share of 19% and 21% of the federal and state recoveries, respectively. The relators also settled personal retaliation claims under the False Claims Act.

"Those individuals in positions of trust within the healthcare industry have an inherent duty to be forthright in their claims submittals to those government programs that pay for their services. Through the False Claims Act settlement and the associated monetary judgments announced today, the defendant in this case, Dr. Anthony Clavo, understands this and the U.S. Government's position on this a lot better."
George Crouch, Acting Special Agent in Charge, FBI Atlanta Field Office

Bracker & Marcus LLC would like to thank and congratulate everyone who assisted with the prosecution of the case, including Assistant U.S. Attorney Lena Amanti, state Assistant Attorney General Sara Vann, and its co-counsel, Oscar Prioleau of Prioleau & Milfort, LLC.

Tennessee Pharmacy Settles False Claims Act Case

Relator to receive 18% share of $117,000 settlement of allegations of improper billing to Medicare and TennCare.

Bracker & Marcus LLC is pleased to announce that the United States and the state of Tennessee have settled allegations of fraud by Signal Mountain Pharmacy, LLC brought forward by our client. The allegations, raised under the federal and Tennessee False Claims Acts in the Eastern District of Tennessee, were settled for $117,000, of which our client will receive an 18% relator's share.

FCA cases are often brought against massive corporations, hospitals, and medical groups, resulting in settlements of millions of dollars. This case, by contrast, involved limited claims against a single pharmacy in the affluent suburbs of Chattanooga, for billing Medicare, Tricare, and TennCare for FDA-approved doxycycline while dispensing non-FDA-approved bulk substances, and for failing to reverse claims for prescriptions that were not dispensed.

Because of this, we explained from the beginning that any potential reward would be relatively small. But our client did not hesitate: he wanted only to do the right thing. A whistleblower whose primary interest is righting a wrong is our favorite kind of client, and we filed this case on his behalf shortly thereafter.

Over the next several months, our client even flew across the country (and spent many hours in the car with Julie and myself) to meet with the government for just a few hours to discuss his case. From a purely monetary perspective, his time was better spent working at his new job. But by being willing to give up his time and energy, he not only helped to recover $117,000 for the taxpayers, he ensured that going forward, the pharmacy would only be using FDA-approved substances, safeguarding the health of his former customers.

Not every qui tam firm would have filed this case. When Congress passed and amended the False Claims Act, it wanted to incentivize whistleblowers and FCA attorneys to bring cases no matter how small the fraud may be. And so it made the False Claims Act a "fee-shifting" statute, so that a losing defendant has to pay the hourly rates of the relator's attorneys. Defendants argue that this results in a windfall, but this case exemplifies why the fee-shifting provision exists. Without it, law firms simply could not afford to bring complicated and expensive lawsuits against smaller entities. In fact, even with the fee-shifting, many qui tam firms still require a minimum amount of damages (sometimes in the low millions) before they will consider taking on such a case because of the amount of time and care required to litigate a False Claims Act case.

All of our cases receive the same level of attention, no matter their size, and our cases that are valued in the hundreds of millions of dollars permit us to defend taxpayers and protect whistleblowers in cases valued in the hundreds of thousands of dollars. We felt the fraud in this case was blatant and potentially dangerous, and it was important to us to give the government a chance to stop it.

Bracker & Marcus would like to congratulate our client (who, as you can probably tell, would prefer to stay out of the spotlight). We would also like to congratulate Assistant U.S. Attorney Jeremy Dykes and Tennessee Assistant Attorney General Eli Swiney, whose phenomenal work on this case made the settlement happen.