In Delaware, major healthcare fraud is civilly and criminally prosecuted by the United States Attorney’s Office and the state’s own Medicaid Fraud Control Unit.
The federal government sometimes accomplishes this task with the assistance of the Delaware Medicaid Fraud Control Unit (MFCU). The MFCU takes the responsibility of stopping fraud very seriously and is often assisted in its efforts by the bravery and actions of whistleblowers.
Modeled after the federal False Claims Act, the Delaware False Claims Act permits private citizens to bring qui tam actions on behalf of the State of Delaware to recover treble damages and civil penalties. Delaware False Claims and Reporting Act, Title 6, Chapter 12 of the Delaware Code.
Nolan Auerbach & White represents whistleblowers in federal court only. We will bring cases on behalf of whistleblowers under the Delaware qui tam statute as part of an action under the federal False Claims Act. We do so under the Court’s pendent jurisdiction.
The liability provisions of the Delaware False Claims Act, 6 Del. C. § 1201(a), provide liability for any person who:
(1) knowingly presents, or causes to be presented, directly or indirectly, to an officer or employee of the Government a false or fraudulent claim for payment or approval;
(2) knowingly makes, uses, or causes to be made or used, directly or indirectly, a false record or statement to get a false or fraudulent claim paid or approved; or
(3) conspires to defraud the Government by getting a false or fraudulent claim allowed or paid.
Cases completed in Delaware that were originally brought in a Delaware federal court include:
DOJ announced that Rotech Medical Corp. agreed to pay $17 million to settle allegations that it fraudulently overbilled government health care programs for respiratory equipment, supplies and services. The Government alleged that from 1995 to 2000 Rotech submitted false claims to Medicare, Montana Medicaid, the Department of Veterans Affairs, and Indian Health Service programs. These allegations listed in the Complaint included Rotech submitting forged and falsified documents. The alleged fraudulent activity included improperly billing the Government for durable medical equipment like oxygen cylinders, submitting duplicate claims and claims for undelivered items, claims for medically unnecessary drugs and equipment, claims for treating deceased patients, claims that were arbitrarily inflated due to a lack of competition, and claims for oxygen services and equipment based upon self-qualifying tests that violated federal payment regulations.
DOJ announced that AstraZeneca agreed to pay $355,000,000 to resolve criminal charges and civil allegations in connection with its pricing and marketing practices with regard to Zoladex, a drug used primarily for the treatment of prostate cancer. AstraZeneca pleaded guilty to conspiring to violate the Prescription Drug Marketing Act by causing the submission of claims for payment for Zoladex that had been provided as free samples to urologists. Damages to the Government as a result of this conduct totaled $39,920,098 across Medicare, Medicaid, and other federally funded insurance programs. AstraZeneca agreed to pay a $67,872,156 criminal fine. AstraZeneca will pay $266,127,844 to settle allegations that it caused false claims to be filed with the Medicare, TRICARE, DOD and Railroad Retirement Board Medicare programs as a result of fraudulent drug pricing schemes, sales, and marketing misconduct. In addition, AstraZeneca settled claims of civil liability to the Medicaid program by paying the United States and the states $24,900,000 to resolve allegations that it caused false and fraudulent claims to be filed with the states as a result of its drug pricing and marketing misconduct. The Government alleged that AstraZeneca failed to provide the state Medicaid programs the best price for those drugs as required by law. This investigation commenced after Douglas Durand, former Vice President of Sales for TAP Pharmaceutical Products, Inc. filed a civil lawsuit under the False Claims Act. As part of this settlement, Durand will receive approximately $47.5 million of the civil recovery pursuant to the False Claims Act qui tam whistleblower provisions.