When Hospitals and Big Pharma Commit Fraud

Healthcare fraud costs the U.S. tens of billions of dollars every year. It is a type of white-collar crime that involves filing dishonest or false billings to the government (through Medicare, for example). This can take many forms, which is why it is so difficult to detect, and so important for anyone with knowledge of fraud to come forward. The whistleblower lawyers at Pintas & Mullins Law Firm detail recent multi-million dollar lawsuits and the private citizens who exposed the crimes.

Whistleblowers - individuals who report the fraud – are protected from retaliation and job loss through federal statute. They are also rewarded, receiving between 15 to 25 percent of the recovery. This can add up to millions of dollars for the whistleblower, particularly if defendants are deep-pocketed companies like hospital chains or pharmaceutical companies.

What is a Whistleblower Lawsuit?

First, some basics: whistleblower lawsuits (also called qui tam lawsuits) are filed under the False Claims Act. This law allows private citizens with evidence of fraud to sue the individual or company on behalf of the government. The lawsuit is not made public until the Department of Justice investigates the evidence and chooses whether or not it will join the case. Even the person or company being accused of fraud is not told of the lawsuit until after the government's decision.

It is critical, however, that the whistleblower hires an attorney and files their claim as soon as possible. Only the first person to file the claim is entitled to a percentage of the settlement or verdict. How much the whistleblower receives depends on how involved or critical the whistleblower was in the case.

Most qui tam lawsuits are settled through negotiation rather than court trials. For example, a group of 32 hospitals recently settled with the government over allegations that they submitted fraudulent claims to Medicare. The hospitals allegedly billed Medicare for inpatient stays for a type of spinal fracture treatment (kyphoplasty), which can often be done as an outpatient procedure.

This is part of a larger crack down on these types of procedures. The Justice Department has recovered more than $100 million in settlements with more than 130 hospitals over false billings for this spinal procedure.

Individual doctors can also be targeted for whistleblower claims. A cardiologist in Ohio was recently sentenced to 20 years in prison for falsely billing Medicare for unnecessary heart surgeries, stent insertions, and other treatments. The doctor, Harold Persaud, was charged with overbilling totaling $29 million.

Pharmaceutical Companies

Fraud charges aimed at Big Pharma typically center on advertising and kickback schemes, where they indirectly pay doctors to prescribe or sell their products. Big Pharma companies like Pfizer are publically-traded, meaning they have to appease Wall Street and shareholders with large profits. Because they are expected to make so much money, they intentionally market drugs and devices to patients who do not really need them.

It goes without saying that medical decision-making should never be controlled by Wall Street, but it is. Not only are we receiving drugs and devices unnecessarily, making ourselves vulnerable to devastating side effects, but we are also wasting billions of healthcare dollars.

A perfect example of this type of fraud is the recent lawsuit over Risperdal, an antipsychotic drug sold by Johnson & Johnson. In November 2013, J&J agreed to pay $2.2 billion for illegally marketing Risperdal and several other drugs, in the largest health care fraud settlement in U.S. history.

In that lawsuit, which was filed by a whistleblower with knowledge of the violations, evidence showed that J&J hired a ghostwriter to collaborate on articles for medical journals with doctors. The company would then have their salespeople distribute the articles, making it seem like third-party studies were confirming Risperdal's safety and efficacy, when in fact they were written by a J&J employee. Doctors would then prescribe Risperdal for off-label uses based on these "studies," such as to young men with behavioral problems.

Unfortunately, Risperdal turned out to promote the growth of female hormones. So these same young men (between the ages of 7 and 17) were prescribed a powerful antipsychotic drug that was never proven to be safe or effective for their conditions. As a result of the drug's hormonal side effects, thousands of boys developed female breasts, a condition called gynecomastia.

Marketing Ripserdal to children was illegal, and just one of the reasons J&J agreed to the largest health care fraud settlement in history. Thousands of boys have filed gynecomastia lawsuits against the company, and the numbers are expected to rise.

Our team of Risperdal lawyers is currently accepting gynecomastia cases. We offer free case reviews to potential clients nationwide, and will travel to you to help guide you through the process of filing an injury claim.

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