The US Department of Justice Recovers More than $2.8 Billion in False Claims Act Claims in 2018 – Part 2

There were many other interesting False Claims Act recoveries in 2018, in addition to those mentioned in part one our yearly False Claims Act summary.

One case involved a settlement of $270 million by HealthCare Partners Holdings LLC (HCP), doing business as DaVita Medical Holdings LLC – for inflated Medicare bills.  According to the DOJ, “DaVita acquired HCP, a large California-based independent physician association, in 2012. DaVita disclosed improper conduct by HCP. Additionally, whistleblowers asserted that HCP

“engaged in ‘one-way’ chart reviews in which it scoured its patients’ medical records to find additional diagnoses that enabled managed care plans to obtain added revenue from the Medicare program. At the same time, however, it ignored inaccurate diagnosis codes revealed by its reviews that, if deleted, would have decreased Medicare reimbursement or required the plans to repay money to Medicare. “

Other health care settlements involved:

  • Inflated payments
  • Charging for more expensive inpatient services that should have been billed as observation or out-patient services
  • Illegal payments to doctors in return for patient referrals
  • Other allegations

The Anti-Kickback Statute

Some False Claims Act cases also led to criminal charges. Some cases involved the Anti-Kickback Statute. The Anti-Kickback Statute is meant to make sure doctors provide services based on need and not on financial profit. Violations of the Anti-Kickback Statute can be used to show the claims were “false” under the False Claims Act.

Procurement Fraud

Procurement fraud involves overbilling or improper charges for the goods and services the country needs. Some of the 2018 procurement fraud settlements and verdicts included the following:

  • Toyobo Co. Ltd. of Japan and its American subsidiary, Toyobo U.S.A. Inc., f/k/a Toyobo America Inc. (collectively, Toyobo). Toyobo was charged with selling a defective fiber used in bullet-proof vests. The US government also claimed that Toyobo knew the fiber would quickly degrade when used in “normal heat and humidity.” Despite knowing of the defect, Toyobo actively marketed the fiber and even published data it knew was misleading. Toyobo’s continued efforts to hide the defects delayed the studies the National Institute of Justice did years later to confirm the defect. Vests that don’t stop bullets take lives. Toyobo settled its claims for $66 million. Other companies involved in the sale of the fiber, called Zylon, had settled False Claims act allegations previously.
  • Inchcape Shipping Services Holdings Limited, a UK marine services contractor and some subsidiaries settled False Claims Act charges for $20 million. They were charged with overbilling the US Navy by submitting bills that “overstated the number of goods and services provided, billing at rates in excess of applicable contract rates, and double-billing for some goods and services. “
  • TrellisWare Technologies, Inc. A California communications company. This company paid $12 million to resolve complaints that the company was not eligible for contracts with the Army, Navy, and Air Force – that the company had entered into. It was not eligible because it was a “majority-owned subsidiary of a large company at the time it was awarded and performed the SBIR contracts. “

Other fraud cases involved improper mortgage loans, knowing deviation from standard auditing practices, companies that improperly “dumped” products on the US market below cost, and other acts.

Learn more about qui tam actions by calling a skilled California whistleblower lawyer now

There are many different types of fraud and fraudulent schemes. In addition to being entitled to a percentage of a successful recovery, valid disclosures also help the public save money and save lives.  The False Claims Act lawyers at Stephen Danz & Associates, have decades of experience fighting for whistleblowers. To speak with respected qui tam lawyers, call (877)789-9707 to make an appointment with a skilled attorney. Se Habla Espanol.