Headlines that Matter for Companies and Executives in Regulated Industries

Texas Clinical Laboratory and Owner to Pay $5.7 Million to Resolve Outstanding FCA Judgment

Defunct BestCare Laboratory Services LLC and its founder will pay $5.7 million to settle an outstanding 2018 False Claims Act (FCA) judgment. The settlement amount is based on the US Department of Justice’s (DOJ) ability-to-pay policy, and to date, the DOJ has already collected $789,652 from BestCare and its founder.

BestCare provided clinical laboratory testing for nursing home residents, including Medicare beneficiaries. According to DOJ’s press release, BestCare’s owner directed the company to knowingly submit false claims to Medicare for travel allowance reimbursement that did not accurately reflect the mileage traveled by lab technicians when collecting specimens from nursing home residents. BestCare billed Medicare for $10.1 million in claims for miles that no laboratory technician ever traveled.

The case dates back to 2008 when Dr. Richard Drummond filed a qui tam lawsuit against Bestcare after he hired a former BestCare employee and learned of the improper billing practices. As part of the settlement, Dr. Drummond will receive $1,311,000.

Read the DOJ’s press release here and additional information regarding the case is available here.

Florida Judge Issues Last Sentence in $53 Million Health Care Fraud Conspiracy

On August 1, Edgar Perez was the last of 12 defendants to be sentenced for his role in a health care fraud conspiracy that billed Blue Cross Blue Shield (BCBS) for services, such as allergy tests and physical therapy, that patients never received. Specifically, Perez was sentenced to 12 months’ imprisonment and ordered to pay $547,560 in restitution, which brings the total amount of restitution owed among the defendants to more than $9 million. According to DOJ’s press release, the defendants opened clinics in South Florida and paid recruiters for the personal information of BCBS beneficiaries. The defendants then submitted fraudulent bills to BCBS and transferred the payments received from the clinic bank accounts to personal accounts.

Read the DOJ’s press release here.

Pennsylvania Pharmacies and Owners to Pay $3.5 Million to Resolve FCA Allegations

JJ Pharmacy, Inc. and Future Pharmacy, Inc., along with their respective owners, agreed to pay over $3.5 million to resolve allegations that they violated the FCA without admitting any liability. According to DOJ’s press release, from January 1, 2012, to December 31, 2016, the pharmacies billed Medicare for prescriptions that were not actually dispensed, including Lidocaine, Lidoderm, Advair Diskus, Mexium, Credon, and Abilify. In addition, the pharmacies surrendered their DEA Certificates of Registration and agreed to a five-year federal health care exclusion. As a result, the pharmacies will not be able to receive payments from any federally funded health care insurer.

Read the DOJ’s press release here.