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Our Recent Notable Cases

Nolan & Auerbach, P.A. cases break each year and we have a long history of successfully completed healthcare fraud qui tam cases. For example:

On September 1, 2010 pharmaceutical manufacturer Allergan, Inc. agreed to pay $225 million to resolve civil allegations that it unlawfully promoted its drug Botox® Therapeutic for unapproved uses and that it paid illegal remuneration to health care providers to induce them to prescribe the company’s products. In addition, the company agreed to pay a $375 million criminal fine and to plead guilty to a misdemeanor charge of introducing this misbranded drug into interstate commerce. Nolan & Auerbach, P.A. represented two of the key whistleblowers in this case, which was brought under the qui tam, or whistleblower, provisions of the False Claims Act. This settlement also resolves two other qui tam actions raising similar allegations. For the Department of Justice Press Release click here. For the Nolan & Auerbach, P.A. Press Release click here.

Our clients’ cases against Schwarz Pharma and a subsidiary, Kremers Urban, resulted in a $22 million dollar recovery. The cases, unsealed in April, 2010, maintained that Schwarz and a subsidiary (Kremers Urban, LLC) submitted false quarterly reports to the government related to a pair of drugs, Deponit and Hyoscyamine Sulfate Extended Release (Hyoscyamine Sulfate ER). The Complaints alleged that Schwarz and Kremers misrepresented the regulatory status of both drugs and failed to advise CMS that these unapproved drugs did not qualify for coverage under federal healthcare programs.

In February 2010, Eon Labs, Inc. became the first Defendant to enter into a settlement agreement to resolve our client’s case against multiple defendants based upon the sale of unapproved drugs to Medicaid. Eon agreed to pay $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 previous finding that there was a lack of evidence to support effectiveness.

In October 2009, McAllen Hospitals, L.P., d/b/a South Texas Health System, a wholly owned subsidiary of Universal Health Services, Inc. entered into a Settlement Agreement pursuant to which it agreed to pay $27.5 Million to resolve claims (see Complaint) concerning violations of 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. 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,  click here.

In February 2009, the Government intervened in our client’s case against Scios, Inc. and Johnson & Johnson regarding  off-label marketing of the prescription drug Natrecor. 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 August 2008, Victory Memorial Hospital  agreed to a settlement to resolve claims that the hospital defrauded the Medicare program stemming from a Medicare overpayment to the hospital.  In the qui tam complaint, our client alleged that Victory Memorial submitted cost reports for 1996 and 1997 that understated certain revenues for patient care, known as “charges.” This  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.

In 2007, Schering Plough Corporation and a related company 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,  Schering Sales, Corp. plead 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 our clients’ qui tam lawsuit, which inter alia, alleged  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 handled by Nolan & Auerbach, P.A. attorneys:

• 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 provide 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.
• Multiple DME companies and individuals have paid millions involving  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.
• A New York City hospital  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 received a multi-million dollar Relator share.
• A large medical equipment provider 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 received a sizeable Relator share in this case - one of the first off-label cases ever brought.
• Lifeline Health Care paid $3.1 million in settlement of a case concerning allegations of false claims made to federal health care programs for patients who did not qualify for home health care.
• Nova Southeastern University paid $4.1 million  to settle our client’s lawsuit concerning false claims for psychologicial services. Our client had complained internally for years and no one listened. The settlement of the lawsuit vindicated our client and straightened out the university’s compliance issues.