How a Civil War law forced a local medical group to pay $5.3M

In 1863, at the height of the Civil War, Congress passed legislation to ensure suppliers to the Union Army were not cheating the government.

More than 150 years later, that legislation — the False Claims Act — and its amended derivatives enabled a local worker to challenge the billing practices of her former employer, Hudson Valley Hematology Oncology Associates, resulting in a $5.3 million settlement announced Friday by Preet Bharara, U.S. Attorney for New York’s Southern District.

The medical practice, which treats cancer and blood disorders and has offices in Poughkeepsie and Fishkill, admitted it illegally waived Medicare co-pays for patients and then added those amounts to its bills to the taxpayer-funded health insurance program.

It also admitted it entered billing codes indicating doctors had overseen or administered a procedure, when only a nurse had done so, thereby inflating the bills to Medicare and Medicaid.

The following doctors were listed in the federal complaint and settlement agreement: Ram Kancherla, Ponciano Reyes, Michael Maresca, Lev Davidson, Julia Schaefer-Cutillo, Jeffrey Steward, Gerald Colvin, Tauseef Ahmed, John Nelson, Carmella Puccio, Karen Seiter, Delong Liu, Asim Aijaz and Sheetal Shrimanker.

How those revelations came to light is representative of the growing success of False Claims Act whistleblower lawsuits in health care cases.

Last December, the Department of Justice announced it had obtained more than $3.6 billion in settlements in fiscal year 2015. It marked the fourth year in a row the department had exceeded that total. Health care cases accounted for the largest share of those recoveries, $1.9 billion.

In the case of Hudson Valley Hematology Oncology Associates, the actions were initiated by Lucille Abrahamsen, a Highland resident who served as an accounts receivable representative and filed a lawsuit under the False Claims Act.

Abrahamsen did not return a phone message seeking comment. But her attorney, Reuben Guttman of Washington, D.C.-based firm of Guttman, Buschner & Brooks PLLC, said she contacted the law firm after she became aware of the improper billing practices.

“In this day and age, people who see wrongdoing in the workplace … know enough to see that there are red flags,” Guttman said.

Guttman said his office receives hundreds of calls a year but brings only a handful of cases. Sometimes there is not enough evidence to make a claim. Sometimes there is no wrongdoing. Sometimes there is a violation, but an action can only be brought directly by the government.

After conducting its own investigation, the law firm filed the lawsuit on Abrahamsen’s behalf on April 14, 2014.

“Once we file the complaint, the government processes the complaint and sends it to the appropriate agencies involved,” he said.

That led to a meeting at Bharara’s office, an investigation by the federal health and human services department and finally, Friday’s settlement.

“This is a terrific result,” Guttman said, “and it is an example of how efforts to combat Medicare and Medicaid fraud are now being carried out the provider level.”

Whistleblower Case Results In $28 Million Settlement; Case Is Reminder That Healthcare Fraud Is An Important Election Year Issue

Washington, D.C. — A whistleblower case alleging the payment of kickbacks by Abott Laboratories to induce prescriptions for the drug Depakote, for elderly patients in nursing homes, has resulted in a $28 million dollar settlement with one of the nation’s largest long term care pharmacies, Omnicare.

“This case is a reminder – especially in an election year with healthcare and the conduct of big pharma at issue – that healthcare fraud and waste continues to compromise patient care and drain valuable healthcare dollars,” said Reuben Guttman of Guttman, Buschner & Brooks (GBB) PLLC which represented lead whistleblower, Meredith MCcoyd. In addition to Guttman, the GBB team included Traci Buschner and Caroline Poplin, MD, JD, the firm’s Medical Director.

The case was filed and resolved under the Federal False Claims Act (FCA). That statute allows whistleblowers to bring suit in the name of the government.

According to the complaint in intervention filed by the United States Department of Justice (DOJ), “By knowingly and actively soliciting kickbacks to promote Depakote, Omnicare enhanced its profits at the expense of the elderly nursing home residents it purported to protect. . .”
The government’s complaint in intervention also alleged that “in exchange for Abbott’s kickbacks, Omnicare engaged in intensive efforts to convince nursing home physicians to prescribe Depakote. . .”

Guttman, Buschner & Brooks PLLC, www.GBBlegal.com, is one of the nation’s leading whistleblower law firms. Attorneys at the firm have represented whistleblowers in cases returning more than $5 billion to state and federal governments. For more information on the False Claims Act go to www.whistleblowerlaws.com

Compliance enforcement for sale?

Trial lawyer Reuben Guttman questions how America’s attorney generals and the political organisations with which they associate raise funds.

Sometimes the press has a way of seeing the tip of the iceberg without enquiring into the breadth and depth of the whole mass. Such is the case with Pam Bondi, Florida’s attorney general. Amidst her purported investigation of Trump University, she took a $25,000 campaign contribution from Donald Trump’s Foundation. On the face of it, the payment violated federal law because charitable foundations cannot use their money for political campaign contributions. To make matters worse, while the New York State attorney general embarked on litigation against Trump University, Bondi chose not to jump into the fray. While it does not look good, this is perhaps the tip of the iceberg. So what’s underneath the tip?

Compliance enforcement at the state level is either for sale or has the appearance of being for sale. And as lawyers are taught in law school, even the appearance of impropriety has the capacity to impact confidence in the rule of law.

State attorney generals control the enforcement spigot. They make threshold decisions about whether to enforce a law, whether a set of facts even constitutes a violation, and whether enforcement should be privatised through retention of outside law firms.

Given their roles in making critical decisions about law enforcement, one would think that efforts would be taken to ensure that attorney general decision making is not tainted by the appearance of impropriety. Curiously, rather than steer clear of that appearance, attorney generals have institutionalised it through creation of the Republican Attorney Generals Association (RAGA) and the Democratic Attorney Generals Association (DAGA). These organisations – the officers of which are elected attorney generals – raise funds from some of the very individuals and corporations who are within the orbit of the attorney general enforcement authority.

Through various functions, RAGA and DAGA arrange settings for regulators to mingle with the regulated. This year, RAGA has events scheduled at the Broadmoor Resort in Colorado, a retreat at Pebble Beach, California and a meeting at Omni Barton Creek in Austin, Texas.  Meanwhile DAGA will be holding a reception and dinner at the Four Seasons Hotel in Washington, DC, a 2017 winter conference in Fort Lauderdale and a spring 2017 conference at the Nines Hotel in Portland, Oregon.

A glance at information gathered by the Center for Responsive Politics provides insight into DAGA’s funders and a hint at with whom the Democratic AG’s mingle. Funders range from large pharmaceutical companies – some of which have been the target of investigations and compliance enforcement – to a range of law firms, some of which have represented state agencies and even the offices of attorney generals.

A 2014 membership benefits breakdown by RAGA, disclosed by the New York Times, lists benefits accorded to those whose annual contribution is $125,000. Members of the “Edmund Randolph Club” get a “quarterly call with a featured attorney general,” the “opportunity to submit issue briefing topics and to be a panellist at a RAGA National Meeting,” and “Access to the annual RAGA (2014) retreat in San Diego.” For the record, Edmund Randolph was the first attorney general of the United States.

For its part, the DAGA website makes no bones about selling access to the offices of the attorney general the website claims to be the “second most powerful in state government.” The website states that as a supporter of DAGA, you will enjoy a list of benefits including “Issue conferences,” “AG roundtables,” “political updates,” and a “Democratic AG Directory” where “DAGA members receive a comprehensive directory of all Democratic Attorney Generals and their key staff and office contacts.” The description of the AG Roundtables makes clear that they are designed to “provide a unique opportunity for focused conversation with specific AG’s in small settings.”

The RAGA website is clear about its mission: to get Republicans elected as attorney generals. This year RAGA has focused its efforts on the race for North Carolina’s attorney general. Rather than merely promoting the qualifications of the Republican candidate, RAGA has gone one step further and launched a website dedicated to the Democratic candidate, Josh Stein. The site is called ExtremeHarvardRadical.com.  This so-called “extreme radical” is a North Carolina state senator who spent seven years as senior deputy attorney general of North Carolina and was honoured by both Mothers Against Drunk Driving and the American Association of Retired Persons. Yes, Stein is guilty of securing degrees from Harvard Law School and Harvard’s Kennedy School of Government. His campaign website also discloses that he is Jewish and that he and his wife belong to a Synagogue, which makes one wonder if calling him a “Harvard radical” is a dog whistle for something else?

The DAGA site has a more vanilla message about elections: there are 27 Republican AG’s and 24 Democratic AG’s with key races in nine states this year, including North Carolina.

Placed in context, here is a message for those nine new AG’s: Maybe you should make a clean break from accepting campaign funding from those whom you regulate? And maybe membership in DAGA or RAGA is not something to brag about?

And what about Pam Bondi?  It turns out that she is the immediate past chair of RAGA’s Executive Committee.

Reuben Guttman is a trial lawyer and founding partner at Guttman, Buschner & Brooks.

Reuben A. Guttman

rguttmanReuben A. Guttman
Senior Founding Partner

(202) 800-3002
rguttman@gbblegal.com

Practice Areas
Consumer Law
Complex Litigation
Complex Employment and Labor
Civil Rights

Education
Emory Law School (J.D., 1985)
University of Rochester (BA, 1981)

Admissions
The State of Georgia
The District of Columbia
The Commonwealth of Pennsylvania
The State of New Jersey
The United States District Courts for the
– District of Columbia
– District of New Jersey
– District of Nebraska
– Northern District of Georgia
– District of Maryland
– Western District of Michigan
-Eastern District of Pennsylvania
The United States Courts of Appeal for the
– Third Circuit
– Eleventh Circuit
– Fourth Circuit
– D.C. Circuit.

Boards/Memberships
American Constitution Society National Board Emory Law Deans Advisory Board
Emory Law Complex Litigation Institute (ex officio)

Sitting with Ralph

Trial lawyer Reuben Guttman describes a meeting with renowned lawyer and political activist Ralph Nader.

Half a century after publishing Unsafe at Any Speed, a book exposing the hazards of General Motor’s Corvair, consumer advocate Ralph Nader is holding an anniversary celebration in the form of what he calls a “civic mobilisation.” The event will be held at Washington DC’s Daughters of the American Revolution (DAR) Constitution Hall, 26-29 September, 2016.

The DAR Hall itself is not without historic significance. Renowned African American singer Marian Anderson appeared there a number of times. But that was after 1939, when she had been denied the right to appear on the DAR stage and as a result thousands of DAR members, including First Lady Eleanor Roosevelt, resigned their membership. Anderson instead sang on the steps of the Lincoln Memorial.

Nader has himself been a slice of American history. He is not just a consumer advocate but, at least for my generation, has been “the” consumer advocate. His trajectory was made possible by his own efforts, those he assembled to work with him or for his causes, and not because of his ties to pre-existing institutions or parties. Fifty years after the publication of Unsafe at Any Speed, Ralph Nader is an American institution.

And so when Chris Nace, one of the nation’s leading trial lawyers, asked me to sit with Ralph Nader and a handful of other trial lawyers to hear about Nader’s plans for the “civic mobilisation,” I could not resist the opportunity. Our paths had crossed at a distance over the years through various interactions with his organisations, but I had never really had the opportunity to talk with him in a small group setting. Still, Nader seemed part of my orbit. Back in elementary school, I remember that our Weekly Reader had a feature story on “Nader’s Radars,” a group of young lawyers investigating corporate abuse. I was proud to raise my hand and tell my teacher that my older brother was one of them and working for Nader’s Center for Study of Responsive Law. Many years after I became a lawyer, I had the opportunity to serve as outside litigation counsel to the Oil, Chemical & Atomic Workers Union (OCAW); the union whose members or leaders included whistleblower Karen Silkwood and Tony Mazzochi, the father of the Occupational Safety and Health Act. The OCAW leadership recognised the symbiotic relationship between organised labour and the consumer movement and within the OCAW circles, Nader, or just “Ralph,” was a moral compass.

At the head of a conference table of trial lawyers at the law offices of Paulson & Nace, Nader talks about tort law under siege. His efforts and use of citizen’s suits and tort law have led to safer consumers goods, from automobiles to children’s toys, and yet Nader is mystified that the proponents of these suits are in some circles characterised as ambulance chasers while those that defend the abuses of corporate greed are deemed “white shoes” lawyers.

He talks about the compulsory arbitration which is privatising the judicial system and eliminating the published precedent that forms the backbone of the common law tradition. He muses about the ethics of corporate lawyers – as officers of the court – who bolt compulsory arbitration clauses into contracts for consumer goods and services and thus eliminate any right to adjudication in an open court of law, including trial by jury. He notes how even his Harvard Law School classmate, Professor Arthur Miller, one of the most cited experts on the Federal Rules of Civil Procedure, has written about the Supreme Court rulings on class actions, and pleading and summary judgement standards that have tipped the litigation playing field in favour of large corporations and against consumers.

At 82, Nader is still an imposing physical and intellectual presence. He is tall and trim and speaks forcefully about the way the judicial system ought to work.

Nader talking about the practice of law is like listening to an Ivy League Law School Professor from the movie The Paper Chase. And yet, ironically, Nader – who wants to address issues that impact every day consumers – may very well be too practical in terms of his goals to be a tenured professor at a contemporary American Law School. Would US News – which ranks law schools – even give bonus points to a school that placed Nader on its faculty? For his September “civic mobilisation,” Nader would welcome the attendance of law students, but hints at concern that the modern legal theorists who serve as professors in our nation’s legal institutions will not see value in encouraging students to forgo class and listen to talks from some of the nations’ leading practitioners, whistleblowers and scholars who are involved in the practical application of consumer or tort law.

For a Washington DC gathering, the sit down with Nader is an aberration. There is no discussion of compromise or even fund raising. The talk is simply about getting the word out about the “civic mobilisation” and filling the 3,500 seats at Constitution Hall. I wonder, of course, whether such a gathering will make a difference, but remind myself that change is incremental and few people in American history have driven change impacting everyday life as much as Ralph.