In its annual “Outlook” issue, Report on Medicare Compliance interviewed Nolan & Auerbach, P.A. partner Jeb White about the emerging trends and concerns in Medicare fraud. Mr. White commented on the Justice Department’s increased interest in qui tam actions that solely allege kickback schemes. “In the past, DOJ [was] hesitant to get involved in pure kickback cases,” explained Mr. White. Now, DOJ is interested even when a case involves kickbacks alone, because the health reform law made kickbacks a per se False Claims Act violations, noted Mr. White.

Every January, Bloomberg BNA asks the country’s leading healthcare attorneys to predict the emerging issues for the coming year. For the past five years, this respected publication has sought the qui tam perspective from Nolan & Auerbach, P.A. partner Jeb White. This year, Mr. White was quoted nearly a dozen times, spotlighting such trends as increased False Claims Act litigation, targeted exclusions from government healthcare programs, and expanded RAC initiatives. “Time will tell if OIG is merely saber rattling when it comes to exercising its authority to exclude individual providers,” White said. “For the sake of our country’s limited health care dollars, the fraud-fighting community hopes that OIG hangs a few coyotes on the fence, sending a powerful message to the dishonest providers lurking under the radar.”

As the so-called “baby boomer generation” ages into Medicare, the monetary impact of healthcare fraud escalates. This worsening financial maelstrom has caught the eye of the news media. Smartmoney.com turned to Nolan & Auerbach, P.A. partner Kenneth Nolan for a primer on some of the common Medicare fraud schemes. One of the costliest Medicare fraud schemes involves pharmaceutical or medical technology companies “knowingly selling unsafe or ineffective pharmaceuticals, medical equipment, devices and other technologies,” said Mr. Nolan. “Medicare is susceptible to fraud not only because of its size and complexity, but because the system itself makes it easy to defraud the government,” stressed Mr. Nolan. “Most of the scrutiny, if any, is made after payment is made — not before as in traditional business transactions.”

In each of the last five years, the U.S. Supreme Court has released opinions dissecting the False Claims Act. Given this track record, many experts were surprised when the Court refused to hear a case discussing the interplay between the federal Anti-kickback Act and the federal False Claims Act. Nolan & Auerbach, P.A. partner Jeb White explained to BNA, “Upon close inspection, the Supreme Court realized that the so-called circuit split had really been conjured up by the petitioners.” According to Mr. White, “the Supreme Court cemented the First Circuit’s holding that entities that pay kickbacks are liable under the False Claims Act for the resulting false claims.” His analysis was widely parroted by other healthcare law experts.

Given the success of the federal False Claims Act, a number of states have fashioned laws that borrow language from the Act’s whistleblower provisions. For example, when two nurse-whistleblowers were retaliated against in the State of Texas, legislators pushed through anti-retaliation provisions that restored protections for those who report dishonest healthcare providers. Report on Medicare Compliance reported on this development and reached out Nolan & Auerbach, P.A. partner Jeb White, who has testified before state legislative bodies across the country. Mr. White noted that “Texas is taking a page from the False Claims Act.” He recounted that “people started stepping forward and shining the light” on fraud after the U.S. Congress similarly strengthened the federal False Claims Act.

Industry publications turned to Nolan & Auerbach, P.A. partner Jeb White to explain an unusual False Claims Act settlement that originated with a single Medicare beneficiary whistleblower. Mr. White explained that this scenario is “very unusual,” for the vast majority of healthcare cases come from whistleblowers who are behind the corporate walls of dishonest healthcare providers. With that being said, Mr. White hoped that this became a trend, for “[t]he more eyes you have out there looking for potential fraud, the less likely the fraud is going to happen.”

For nearly two decades, the national healthcare whistleblower firm Nolan & Auerbach, P.A. has fought to recover government healthcare dollars infected by illegal kickback schemes. This long-standing track record has placed the firm on the radar screen of industry publications. For example, a leading healthcare publication sought out Nolan & Auerbach, P.A. partner Jeb White after a federal court of appeals held that a Medicare Managed Care Plan can be held liable under the False Claims Act for paying illegal kickbacks to physicians and beneficiaries. Mr. White applauded the court for correctly interpreting the reach of False Claims Act’s liability provisions.

At a recent national conference on qui tam litigation, a high-ranking Justice Department official stressed, “You would be hard pressed to find anyone who knows more about the False Claims Act than [Nolan & Auerbach, P.A. partner] Jeb White.” Reporters took note, for they have increasingly turned to Mr. White for his expertise on emerging False Claims Act trends. For example, leading industry publication Pharmalot turned to Mr. White when an influential court held that False Claims Act is violated when pharmaceutical and device makers pay kickbacks to physicians, even when a hospital or pharmacy was unaware that the resulting prescription was tainted by kickbacks. Mr. White maintained that this was a “game changing” decision for False Claims Act enforcement. Since then, government and qui tam attorneys have regularly cited this landmark court decision.

In September 2010, Nature Medicine asked Jeb White to tackle the number one issue undermining government healthcare programs. In a widely-circulated Op-ed piece, Mr. White opined that pharmaceutical fraud was a continuing drain on government healthcare programs because the masterminds of the frauds scheme with impunity and never face jail time. In a follow-up April 2011 article, Nature credited Mr. White’s Op-ed piece for spotlighting this enforcement blind spot. Since then, a number of government officials have echoed these arguments in the halls of Congress.

For the past decade, Nolan & Auerbach, P.A. partner Jeb White has penned amicus curiae briefs for nearly every Supreme Court case dissecting the False Claims Act. Thus, when reporters need to understand the legal implications of a Supreme Court decision, they have turned to respected whistleblower attorney Jeb White. For example, in this article, Mr. White expressed concerns over a pending Supreme Court case examining the False Claims Act’s public disclosure bar. Unfortunately, Mr. White’s predictions came true, as the Supreme Court read additional procedural hurdles into the False Claims Act.

The False Claims Act legal landscape has changed dramatically since 2009, principally because of recent clarifying legislation. To help guide readers through this evolving terrain, healthcare fraud reporters regularly turn to Nolan & Auerbach, P.A. partner Jeb White, who shepherded the legislation through Congress as the president of Taxpayers Against Fraud. BNA Health Care Fraud Report reached out to Mr. White after the Fifth Circuit ruled that the False Claims Act’s “reverse false claim” provision could be violated by a Pharmacy Benefit Manager. Here, Mr. White spotlighted the far-reaching impact this decision could have on the healthcare industry, particularly since a large percentage of pharmaceuticals are now handled by Pharmacy Benefit Managers.

As one of the first qui tam attorneys to write on the application of False Claims Act to violations of the Current Good Manufacturing Practices (“cGMP“) Kenneth Nolan is regularly contacted by the press to explain this use of the False Claims Act. Most recently, in an in-depth cover story, Pharmaceutical Manufacturing Magazine interviewed Nolan about how qui tam whistleblowers can use the False Claims Act to put the brakes on serious pharmaceutical manufacturing deficiencies.

In this issue, a respected health care trade publication interviewed partner Jeb White about the increased number of qui tam filings against hospitals. “Compliance officers are probably the largest contingency of whistleblowers in the hospital setting,” said White. “It makes sense. Compliance officers raise issues to their bosses, who [sometimes] say ‘stop looking.’ Compliance officers are alienated, isolated, terminated — and then they call me.”

In January 2011, the public was made aware of Nolan & Auerbach, P.A.’s client’s unprecedented qui tam case against two dozen drug companies for selling unapproved drugs. To date, this case has recovered nearly $100 million for the U.S. Treasury. The article notes that “the lawsuit offers some disturbing details in so far as that unapproved meds have apparently been available for years and, in some cases, the FDA failed to do anything to halt the practice.”

In its annual “Outlook” issue, BNA Health Care Fraud Report interviewed Nolan & Auerbach, P.A. partner Jeb White about the issues appearing on his fraud-fighting radar screen. Mr. White said that he was particularly interested in hunting down dishonest medical device manufacturers, including manufactures of durable medical equipment (DME). “DME manufacturers seem to be slow learners when it comes to compliance,” Mr. White said. “The fraudulent business practices that permeated the pharmaceutical

Pharmaceutical manufacturers are becoming increasingly aware that serious manufacturing deficiencies might subject them to False Claims Act liability. In turn, the industry is making strides to fully understand cGMPs and the reach of the federal False Claims Act. For example, PharmaManufacturing.com spotlighted this concern and directed the industry to Nolan & Auerbach, P.A.’s Ken Nolan, for his “excellent checklist” on cGMP violations.

After the US Government settled a ground-breaking qui tam action, brought by a very courageous whistleblower involving manufacturing issues at a pharmaceutical plant, the esteemed industry trade publication The Pink Sheet turned to Nolan for expert insights. “In this particular case, if you read the facts, they are extreme,” explained Nolan. “And the whistleblower was the most well-positioned whistleblower for this type of case, so it was the perfect storm.”

Nolan & Auerbach, P.A.’s clients’ case was involved with the $422 million recovery from Novartis. The firm granted Pharmalot an exclusive interview with one of its clients. “[M]anagement would say you couldn’t use someone [for the speakers bureau] if they didn’t write a lot (prescriptions for Novartis products), even if the person was an authority,” said Novartis whistleblower Jeremy Garrity. Three of the key whistleblowers in this case were represented by Nolan & Auerbach, P.A.

Over 100 publications reported on Nolan & Auerbach, P.A.’s $422.5 million settlement with Novartis. One of the publications, St. Petersburg Times, highlighted the fact that the initial complaint was filed in Florida. Nolan & Auerbach, P.A. partner Kenneth Nolan explained that the U.S. Attorney’s Office in Tampa has a “good reputation” for pursuing cases of health care fraud. Explaining his initial interest in the case, Nolan stated, “We knew that the percentage of off-label sales was robust and the damages would be high.”

News about the $422.5 million settlement with Novartis made national headlines. “’As long as they had a prescription pad and were willing to prescribe our products, they qualified as Novartis speakers,’ Jeremy Garrity, a former Novartis employee, said in a statement from his law firm, Nolan & Auerbach, P.A. ‘The company’s illegal business practices were snowballing and nobody was stepping up to stop them. I had to do something.’”

Businessweek ran a lead story about the $313 million settlement of the firm’s qui tam action against Forest Laboratories. The publication highlighted the fact that the whistleblowers in this case were receiving nearly $15 million.

Chronicling Nolan & Auerbach, P.A.’s latest $300 million+ settlement with a pharmaceutical company, Medical Marketing & Media inquired about the key differences between this case and the firm’s other successful pharmaceutical fraud cases. “Unlike other cases involving off-label marketing of drugs,” this case dealt with “illegally marketing a drug that has never been approved,” explained Nolan & Auerbach, P.A. managing partner Marcella Auerbach, P.A.

Bloomberg Businessweek was one of several national publications to spotlight Nolan & Auerbach, P.A.’s role in a $600 million False Claims Act settlement with Allergan. This publication was particularly interested in the kickback allegations raised in this case. “Illegal kickbacks cloud the medical judgment of health care providers,” said Nolan & Auerbach, P.A. partner Jeb White. “The anti-kickback laws ensure that physicians prescribe drugs based on patient need and not personal greed.”

The New York Times was one of the first national publications to report on the $600 million settlement of Nolan & Auerbach, P.A.’s qui tam case against Allergan. “The significance of the case is that Allergan promoted Botox for off-label uses, uses that were not approved by the FDA as being safe and effective,” said Marcella Auerbach, managing partner of Nolan & Auerbach, P.A.

As news broke about an impending civil False Claims Actsettlement with a large Florida physician group, questions were raised in the public about whether the group would also face criminal charges. Former federal prosecutor and managing partner Marcella Auerbach stated that a criminal case did not appear likely at this point. “They would try to seek a global resolution, to resolve any criminal and civil case,” Ms. Auerbach said. “What companies or physicians groups want to do is resolve all pending allegations, civil and criminal, not piecemeal.” 

After several large False Claims Act settlements involving pharmaceutical companies, PBS Nightly Business Report explored the motivations behind massive pharmaceutical fraud schemes. “They have decided to undertake the gamble because they don’t think they are going to get caught. Unfortunately, in most of the cases, they don’t get caught,” said managing partner Marcella Auerbach. The False Claims Act was highlighted as a possible fraud-fighting solution. According to Ms. Auerbach, “There’s a return of $15 for every dollar spent on investigators and prosecutors. That’s a much better return that I have heard about on anything lately.” 

The University of Medicine and Dentistry of New Jersey paid over $7 million to settle a qui tam lawsuit alleging that it bilked Medicaid in a long-running double-billing scheme. However, if it had followed the government’s self-disclosure process, it could have saved millions. “It’s a bet,” said managing partner Marcella Auerbach. “They are betting on the fact they won’t get caught.” When concerns were initially raised by the physician-whistleblower, the University turned a deaf ear to his concerns and fired him. “These people are fired for bringing points up,” Ms. Auerbach said, “Then they come to us and they have two claims.”

The Wall Street Journal reported that the Justice Department had intervened in Nolan & Auerbach, P.A.’s client’s whistleblower lawsuit alleging that Johnson & Johnson had marketed its cardiac drug Natrecor for a use that was not approved by FDA. “This is clearly a significant decision and we applaud the Department of Justice for deciding to make this commitment to this case,” said managing partner Marcella Auerbach. Ms. Auerbach estimates the “damages in the hundreds of millions of dollars.”

After the Government decided not to pursue a False Claims Act qui tam action alleging the illegal off-label promotions of a hormone drug, Macleans sought the expert commentary of partner Kenneth Nolan. “There are plenty of meritorious cases that are declined each year.” In fact, Nolan says, U.S. authorities often lack the resources to pursue a qui tam, and prefer to let private citizens do the legal legwork.

Since the False Claims Act was amended in 1986, the Government has increasingly received meritorious qui tam actions spotlighting health care fraud schemes. After the amendments, “the issue of healthcare fraud became more prominent as people became more aware,” said Kenneth Nolan. “It spurred incentive to come forward and file claims.”

Before the government recovered billions of dollars for illegal off-label promotions of drugs, Nolan & Auerbach, P.A. partner Kenneth Nolan was foretelling the coming wave of off-label cases. “[I]t is nice [from the whistle-blower’s point of view] if the drug or drugs at issue are being marketed for unlabeled uses and we can establish that those uses are of questionable efficacy,” Nolan told Pharmaceutical Corporate Compliance Report in a 2004 interview. Since this interview, Nolan & Auerbach, P.A. has assisted the government in recovering over $1 billion in qui tam cases alleging off-label promotions.

Considered a novel use of the False Claims Act, Nolan & Auerbach, P.A. partner Kenneth Nolan stressed, in a 2003 interview with Drug Investor Daily, that the Act could be used against drug companies that were illegally off-label marketing their drugs. “If you have that efficacy issue, or lack thereof, based on active marketing of unlabeled uses, it adds more fuel to the fire … and those types of situations are out there, unfortunately,” said Nolan. Since this interview, Nolan & Auerbach, P.A. has assisted the government in recovering over $1 billion from drug companies that were illegally off-label promoting their drugs.

In advocating the need for more courageous whistleblowers in the fight against fraud, a 2001 Sun-Sentinel editorial highlighted several successful Nolan & Auerbach, P.A. qui tam cases. “People come to me because they are hurt, disillusioned, and angry,” stressed partner Kenneth Nolan. “Most have been fired because they refused to sit by and condone illegal actions. They are motivated by outrage, not greed.”

Tallahassee Democrat reported on the over $50 million settlement of Nolan & Auerbach, P.A.’s client’s qui tam suit, alleging Vencor defrauded the Medicare system. A decade later, this is still one of the largest cost report False Claims Act settlements involving a national hospital chain.

St. Petersburg Times chronicled the courageous efforts of the Nolan & Auerbach, P.A.’sclients that helped the government settle a False Claims Act case against one of the nation’s largest hospital chains. “They questioned the conduct they saw and they were told it was okay,” said Nolan & Auerbach, P.A. partner Kenneth Nolan. “They were unsettled by taxpayers allegedly being ripped off. They had the bravery to come forward and file this action.” 

Telling the story of a successful Nolan & Auerbach, P.A. client who recovered over $4 million for the federal and state governments, Miami Herald provided a glimpse into a whistleblower’s courageous efforts to stop health care fraud. “I feel vindicated,” said Alan Kent. “I didn’t go into this for the money. I went into it to change some things that were wrong.”

The Wall Street Journal announced the government’s decision to intervene in Nolan & Auerbach, P.A.’s qui tam action against Vencor. A few weeks later, the large hospital chain decided to settle for over $100 million to conclude multiple False Claims Act cases. 

The Palm Beach Post applauded the efforts of a Nolan & Auerbach, P.A. client, who recovered over $7 million for the government from a fraudulent drug rehab clinic. “She exposed the fraud, and it was investigated really well by the (Pentagon’s Defense Criminal Investigative Service),” said partner Kenneth Nolan. “As a result, the defendant chose to file for bankruptcy and go out of business.”

Medical Business

The Tampa Tribune reported on the Firm’s qui tam action which revealed a massive Medicare fraud scheme in Florida.

The Palm Beach Post reported on the government’s decision to intervene in the Firm’s qui tam action against a fraudulent drug rehabilitation clinic, which billed the government for “group therapy” when the clinic took patients to the movies.