Brian Dickerson

Three Ohio-based companies, Foundations Health Solutions Inc (FHS), Olympia Therapy Inc, and Tridia Hospice Care Inc, along with 2 company executives, Brian Colleran and Daniel Parker, will pay nearly $19.5 million to settle allegations that the companies submitted false claims for medically unnecessary rehabilitation therapy and hospice services to Medicare. 

FHS provided management services to skilled nursing facilities. Olympia provided rehabilitation therapy services to patients at the skilled nursing facilities, while Tridia provided hospice care services. Colleran and Parker partially controlled or owned each of these companies (or their predecessors) between 2008 and 2013. 

The false claims allegations arose via 2 separate whistleblower suits. In 2011, Vladimir Trakhter, a physical therapist and former Olympia employee, filed suit under the qui tam provisions of the False Claims Act alleging that Olympia submitted claims for medically unnecessary rehabilitation therapy services at 18 skilled-nursing facilities.

Trakhter contended that the therapy services were provided at excessive levels to increase Medicare reimbursement. In several cases, patients were injured.

In 2012, Paula Bourne and La’Tasha Goodwin likewise filed suit against Tridia for submitting false hospice care benefit claims to Medicare. They alleged that Tridia submitted claims for patients who were ineligible for the benefit because the company had failed to perform the appropriate certifications and medical examinations. 

In addition, the settlement resolves allegations that Colleran and Parker solicited and received kickbacks for referring patients to Amber Home Care LLC, a provider of home health care services. 

In a statement, US Attorney Benjamin C. Glassman for the Southern District of Ohio said, “It is unacceptable for an entity entrusted to care for our most vulnerable and elderly citizens to make decisions based on profit, not quality of care. Subjecting the elderly to inappropriate levels of therapy can be physically harmful, and failing to properly certify and re-certify hospice patients can have a devastating impact on patients and their families.” 

In addition to the $19.5 million settlement, FHS and Colleran have entered into a 5-year Corporate Integrity Agreement (CIA) with the HHS Office of Inspector General. The whistleblowers will each collect a share of the settlement. 

Trahkter will receive approximately $2.9 million, while Bourne and Goodwin will share $740,000. Compliance with the complex requirements of the nation’s federal health care programs is vital for any health care entity that submits claims for reimbursement under Medicare, Medicaid, or TRICARE. 

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Articles

Whistleblower suits arise from claims for reimbursement under Medicare, Medicaid, or TRICARE. 

Ohio-based Healthcare Companies Pay $19.5 Million to Settle False Medicare Claims Allegations

In the absence of federal action, Nevada, along with a number of other states, is enacting legislation to combat skyrocketing drug prices and create transparency regarding the pricing activities of drug manufacturers and pharmacy benefit managers (PBMs). 

Nevada’s Senate Bill 539 places new reporting requirements on pharmaceutical manufacturers and PBMs for drugs that are determined to be essential for treating diabetes. Pharmaceutical sales representatives and some non-profit organizations are also faced with new reporting requirements under the law. 

PBMs must now report certain information on or before April 1 of each year (starting in 2018) to the Nevada Department of Health and Human Services, including: 

The total amount of all rebates negotiated with the manufacturers of prescription drugs included in “List 1” during the preceding calendar year. 

The total amount of rebates retained by the PBM.

The total amount of rebates negotiated for the purchase of Tier 1 drugs by Medicare, Medicaid, other third-party governmental recipients, other third-party non-governmental recipients, and beneficiaries under certain ERISA plans. 

The new law also creates a fiduciary relationship between PBMs and third parties that contract with the PBM for pharmacy benefit management services. PBMs must notify these third parties in writing of any activity, policy, or practice of the PBM that creates a conflict of interest interfering with the PBMs’ ability to discharge that fiduciary duty. 

SB 539 imposes substantial penalties for noncompliance with the new reporting requirements. PBMs (and others) may be subject to penalties of up to $5000 per day unless the failure to timely comply is shown to be due to “excusable neglect, technical problems, or other extenuating circumstances.” 

The information provided by PBMs, manufacturers, and others will be made publicly available on the internet by the Nevada Department of Health and Human Services. 

PBM organizations adamantly opposed the legislation, primarily because both drug manufacturers and PBMs consider drug rebate information proprietary. Some have suggested that the new law and its reporting requirements may be challenged in the courts. 

Brain E. Dickerson, Esq. is an advisory board member for the 

Legislation seeks to fight drug cost increases by creating transparency in the pricing activities of manufacturers and pharmacy benefit managers.