Florida Healthcare Fraud/Medicare Fraud Enforcement

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In Florida, major healthcare fraud is civilly and criminally prosecuted by 3 separate United States Attorney’s Offices — the Southern, Northern, and  Middle Districts of Florida.

The federal government sometimes accomplishes this task with the assistance of the Florida 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 Florida False Claims Act permits private citizens to bring qui tam actions on behalf of the State of Florida to recover treble damages and civil penalties. Fla. Stat. § 68.081 et seq.

Nolan Auerbach & White represents whistleblowers in federal court only. We will bring cases on behalf of whistleblowers under the Florida 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 Florida False Claims Act, Fla. Stat. § 68.082(2), provide liability for any person who:

(a)   knowingly presents or causes to be presented to an officer or employee of an agency a false or fraudulent claim for payment or approval;

(b)  knowingly makes, uses, or causes to be made or used a false record or statement to get a false or fraudulent claim paid or approved by an agency;

(c)   conspires to submit a false or fraudulent claim to an agency or to deceive an agency for the purpose of getting a false or fraudulent claim allowed or paid.


Cases completed in Florida that were originally brought in a Florida federal court include:

Ameritox, Ltd., a Texas-based drug-testing company, has agreed to pay the United States$16.3 million to settle allegations that it paid kickbacks to providers to induce them to refer Medicare business. Of the total settlement amount, the federal government will receive $15,486,000, with the remaining amount of $814,000 split among various states. Ameritox also agreed to enter into a 5-year Corporate Integrity Agreement with the Department of Health & Human Services Office of Inspector General.The settlement is the result of a qui tam lawsuit filed by Debra Maul, a former Ameritox senior sales representative. Maul will receive a $3.4 million share of the federal recovery.


WellCare Health Plans Inc. agreed to pay $137.5 million to settle fraud allegations with the U.S. Attorney’s Office in Tampa, the U.S. Department of Justice, and the state of Connecticut. The company also agreed to pay $200 million to settle a class-action securities lawsuit. The False Claims Act allegations were brought in a qui tam action filed by former WellCare analyst Sean Hellein, who claimed that the company stole $400 million to $600 million from the Medicare and Medicaid programs in several states. Hellein also claimed that the company held a celebratory dinner to honor those who successfully un-enrolled 425 infants, saving the company $6.9 million.


Larkin Community Hospital and its current and previous owners have agreed to pay $15.4 million to settle allegations brought under the False Claims Act that they had engaged in unlawful kickback schemes with physicians and had conspired to provide medically unnecessary services to patients to increase their reimbursment from both federal and Florida Medicaid/Medicare. Owners Dr. Jack Jacobo Michel M.D., Dr. James Desnick M.D., Morris Esformes, and Philip Esformes along with ex-employees Frank Palacios and Claudia Pace and 34 related companies were all part of the settlement. The settlement rose out of a compliant filed by the federal government in 2004 against Larkin which alleged that the hospital had paid kickbacks to physicians in exchange for patient referrals and had deliberately admitted patients into the hospital for treatments which were medically unnecessary.


DOJ announced that Adventist Health System Sunbelt Healthcare Corporation, three affiliated hospitals, and a management company that administered their ambulance operations had agreed to pay $20.3 million to settle allegations of overcharging Medicare. The Government alleged the company and hospitals created false physician certifications regarding the medical necessity of ambulance transports operated by the hospitals and then billed them to Medicare.


DOJ announced that Tenet Healthcare Corporation had agreed to pay $22.5 million to settle allegations that it improperly billed Medicare.  The Government alleged Tenet’s North Ridge Medical Center bought physician practices, placed the physicians on salary and paid the physicians for referrals to the hospital, prohibited by federal law.  Sal Barbera, a former Tenet executive, filed this qui tam lawsuit in 1997.  The relator’s share was $5.175 million or 23%.  HHS OIG investigated the matter.  Mark Lavine, Ana Martinez, and Carlos Castillo, Assistant U.S. Attorneys in Miami, and Michael Hertz, David Wiseman, and David Cohen of the DOJ Civil Division in Washington, D.C. represented the Government.


DOJ announced that the Public Health Trust of Miami Dade County agreed to pay $16,814,302 to settle allegations that the Jackson Memorial Hospital, which it owns, had double billed and otherwise overcharged Medicaid. Edward Turner, a former employee of Florida Agency for Health Care Administration, filed this qui tam action.


Palmetto General Hospital of Hialeah, Fla. reportedly agreed to pay $29 million to settle allegations that its home healthcare agency submitted inflated bills to Medicare.  Tenet Healthcare Corp., which owns the hospital, announced the settlement.  Assistant U.S. Attorney Mark Lavine represented the Government along with Sondra Mills of DOJ’s Civil Division.


Quorum Health Group Inc. agreed to pay a total of $95.5 million to settle two qui tam suits.  Quorum is the nation’s largest hospital management company.  The largest payment, or $77.5 million, resolves a qui tam suit alleging that the company systematically defrauded Medicare by filing fraudulent cost reports.  According to the lawsuit, Quorum included non-reimbursable costs in its annual cost reports, and routinely kept a secret set of cost report reserves that specifically identified improper claims filed with Medicare in case the fraud was ever discovered.  The suit was filed by in January 1993 by James Alderson, a former chief financial officer for a Quorum-managed hospital in Whitefish, Montana who was fired from his job for refusing to participate in the fraudulent scheme.


DOJ announced that GAMBRO Healthcare, Inc. and two of its Florida subsidiaries agreed to pay a total of $53.1 million to settle a qui tam suit alleging that the laboratories submitted false claims for services provided to end stage renal disease (ESRD) patients.  According to the lawsuit, the GAMBRO companies billed Medicare, Medicaid, and TRICARE for medically unnecessary lab tests provided to ESRD patients, double billed for lab tests, and violated Medicare billing regulations pertaining to lab test panels.


Bulldog Medical Corporation, Bulldog’s owner/operator Terri Carroll, and Rocket Marine, Inc. d/b/a MLC Geriatric (MLC) stipulated to the entry of a consent judgment against them in the amount of $150 million to settle a qui tam suit alleging fraudulent billings for nonreimbursable goods.  The Government previously collected from the defendants $34 million in alternate remedy relief arising out of the same action.  Bulldog and MLC are both Florida based medical equipment supply companies owned by Carroll.  The suit alleged that Bulldog and MLC billed Medicare for female urinary collection pouches which are reimbursable under Medicare, but in fact provided Medicare beneficiaries with adult diapers which are not reimbursable.  Bulldog and MLC also allegedly submitted false claims for incontinence kits which were not medically necessary and therefore not reimbursable by Medicare.


DOJ announced that National Healthcare Corp. agreed to pay $27 million to settle a qui tam suit alleging that the Tennessee-based nursing home care provider submitted inflated cost reports to Medicare. NHC owns, leases, or provides services to 105 nursing homes nationwide. According to DOJ, the cost reports overstated the number of hours NHC staff spent taking care of Medicare patients, and were contradicted by the nursing staff’s time records. In addition, the lawsuit alleged that NHC billed for therapy when it does not do that type of work.


Abbott Laboratories Inc., B. Braun Medical Inc., Roxane Laboratories Inc. (Boehringer Ingelheim Roxane Inc.) and affiliated entities have agreed to pay the United States $421 million to settle allegations that the companies violated the False Claims Act by knowingly reporting false and inflated prices for numerous pharmaceutical products.


Roxane agreed to pay $280 million to resolve claims against it and related entities: Roxane Laboratories Inc., Boehringer Ingelheim Corp. and Boehringer Ingelheim Pharmaceuticals Inc. Roxane allegedly reported false prices for the following drugs: Azathioprine, Diclofenac Sodium, Furosemide, Hydromorphone, Ipratropium Bromide, Oramorph SR, Roxanol, Roxicodone and Sodium Polystyrene Sulfonate. Abbott agreed to pay $126.5 million to resolve the claims related to dextrose solutions, sodium chloride solutions, sterile water and vancomycin. B. Braun Medical Inc., an American subsidiary of B. Braun Melsungen AG, agreed to pay $14,744,000 to resolve allegations involving 49 of its pharmaceutical products.


Bayer Corporation agreed to pay $14 million to the Federal Government and 45 states to settle a qui tam suit alleging that the company engaged in wholesale price manipulation practices that caused physicians and other health care providers to submit inflated reimbursement claims to Medicaid.  The Federal Government will receive $7,828,000 with the remaining proceeds disbursed among the 45 states.  According to the Government, Bayer falsely inflated reported drug prices, known as the Average Wholesale Price (AWP), used by state governments to set reimbursement rates for the Medicaid program.  Bayer then sold to doctors at a dramatic discount, inducing physicians to purchase its products by enabling the doctors to profit from the reimbursement paid to them by the Government.


Dr. Walter Janke, Lalita Janke, and Vero Beach-based primary care provider Medical Resources LLC, agreed to pay the United States $22.6 million to settle allegations that they defrauded the federal Medicare program by submitting false diagnosis codes that increased the severity of patient diagnoses and resulted in increased Medicare payments.


Dr. Todd J. Scarbrough and Melbourne Internal Medicine Associates P.A. (MIMA) agreed to pay the United States $12 million to settle claims that they defrauded Medicare and TRICARE. The government alleged that from its inception in 2008, MIMA—under Dr. Scarbrough’s direction—improperly billed for certain radiation oncology services by billing for services not supervised, billing for duplicate and unnecessary services, billing for services not rendered, and upcoding services, thereby causing false and fraudulent claims to be submitted to Medicare and TRICARE.