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Our Recent Notable Cases

Nolan & Auerbach, P.A. cases break each year and we have a long history of completed Healthcare fraud qui tam cases. The following is a list of our clients’ recent notable cases.

In February 2010, Eon Labs, Inc. became the first Defendant of multiple to enter into a settlement agreement to resolve our client’s case against them, based upon the sale of unapproved drugs to Medicaid. Eon agreed to pay to the United States $3.48 million to resolve claims that it represented to CMS that its oral nitroglycerin products were Covered Outpatient drugs, when the products were marketed without FDA approval and despite the FDA’s finding that there was a lack of evidence to support effectiveness. The United States still is investigating some of our client’s allegations and therefore part of the case remains Under Seal; however, we are currently in litigation against the remaining Defendants.

In October 2009, McAllen Hospitals, L.P., d/b/a South Texas Health System a wholly owned subsidiary of Universal Health Services, Inc. has entered into a Settlement Agreement pursuant to which it has agreed to pay to the United States and the State of Texas $27.5 Million to resolve claims as set forth in the Complaint concerning the Stark and Anti-kickback laws. McAllen Hospitals, L.P., d/b/a South Texas Health System owns and/or operates multiple health care facilities in McAllen, Texas, including McAllen Medical Center, McAllen Heart Hospital, Edinburg Regional Medical Center, and the South Texas Behavioral Health Center. The case was originally filed in 2005 by our client, Bruce Moilan Sr., and was reported in newspaper articles in Texas and nationally. He received a $5.5 Million relator share, 20% percent of the $27.5 million qui tam settlement. To read the Department of Justice Press Release dated 10/30/2009 click here.

In February 2009, the Government intervened in our client’s case against Scios, Inc. and Johnson & Johnson. Our client’s complaint alleges off-label marketing of the prescription drug Natrecor. In August 2001, the FDA approved Natrecor for “the intravenous treatment of patients with acutely decompensated congestive heart failure who have dyspnea [shortness of breath] at rest or with minimal activity.” Shortly after receiving this approval in 2001, the lawsuit maintains, Scios began an aggressive campaign to market Natrecor for scheduled, serial outpatient infusions for patients with less severe heart failure — a use not included in the FDA-approved label. These patients were prescribed Natrecor infusions for less than 6 hours on a scheduled basis over an extended period of time. Medicare does not cover drugs used for off-label uses unless such off-label use is established to be medically necessary. The federal health care programs — in particular, Medicare — paid substantial amounts for the serial outpatient off-label use of Natrecor. Damages are estimated in the hundreds of millions.

In our client’s case, Victory Memorial Hospital, in August 2008, agreed to a settlement to resolve claims that the hospital defrauded the Medicare program, as well as claims stemming from a Medicare overpayment to the hospital.  In the qui tam complaint, the Relator alleged that Victory Memorial submitted cost reports for 1996 and 1997 that understated certain revenues for patient care, known as “charges.” This allegedly resulted in Victory Memorial having a higher Cost to Charge Ratio for those years, which in turn resulted in Victory Memorial obtaining higher reimbursements from Medicare for certain services.

In part due to our client’s case, Schering Plough Corporation and a related company in 2007 agreed to pay $435 million regarding accusations that it improperly marketed drugs for unapproved uses and lied to the government about drug prices. Under the settlement which was announced in August 2006, Schering Sales, Corp. pleaded guilty to conspiracy and agreed to pay a criminal fine of $180 million. Its parent company, Schering-Plough Corp., agreed to pay another $255 million to resolve civil aspects of the case, including a qui tam lawsuit. Our clients’ qui tam lawsuit included allegations that Schering-Plough marketed drugs off-label for uses that had not been approved by the Food & Drug Administration. One drug was Temodar, a drug the FDA approved only to treat a rare type of brain tumor called anaplastic astrocytoma. The company also promoted the unapproved use of Intron A for the treatment of cancer on the surface of the bladder. 2 of the 3 whistleblowers in this case were clients of Nolan & Auerbach, P.A. Their recovery relates to the off-label marketing of Temodar, Rebetron and Intron A. The final relator share recovery by our two clients was over $12 million.

Other Notable Cases in Years Past:

• in part due to our client’s case, Vencor, Inc. (now known as Kindred Healthcare), — one of the nation’s largest nursing home chains — and Ventas, Inc. — a related real estate investment trust — paid the United States $104.5 million to resolve civil claims that Vencor knowingly submitted false claims to Medicare, Medicaid, and TRICARE, the military’s health care program. Our courageous clients’ case recovery included more than $54 million for improper claims made on Vencor’s hospital Medicare cost reports. Our clients’ case was part of a global settlement which included the largest settlement under the civil False Claims Act based on failure to proved adequate health care at long term care facilities. According to the suit, Vencor inappropriately included on its Medicare costs report the revenue and the expenses of running a separate business. That business supplied its nursing homes with special contracted services such as respiratory therapy. Vencor was thus able to inflate both the revenue and expense lines at its hospitals which, under Medicare’s formulas, boosted its reimbursements from Medicare.
• our client’s qui tam case against multiple corporations and individuals involving allegations that Defendants submitted false claims for wheelchairs and other durable medical equipment. Recoveries and Judgments exceeding $62 million have already been made in this case. While the Government intervention in this case was over 10 years ago, our client continues to receive Relator share payments.
• our client’s qui tam case against a New York City hospital that paid $12 million to settle allegations that it knowingly received in error more than $14 million in two Medicare payments from Empire Blue Cross and Blue Shield relating to its GME program, and then failed to disclose them, as required by law.
• our client’s qui tam case against a large medical equipment provider that paid $1.75 million, to settle allegations that the company inappropriately violated TRICARE healthcare insurance requirements due to the “off-label” sales of one of its products.
• our client’s qui tam case against Lifeline Health Care concerning allegations of false claims made to federal health care programs for patients who did not qualify for home health care and for medically unnecessary services. Lifeline paid $3.1 million in settlement of the case.
• our qui tam case against Nova Southeastern University, Inc. in which Nova Southeastern University was alleged to have submitted false claims for psychological services. The University paid $4.1 million dollars to settle our client’s lawsuit.