Opinion and Research

Joel Hesch, Esq asked:


Below is a list of the top 10 or largest False Claims Act cases in the United States. Under the federal False Claims Act, whistleblowers receive a reward of between 15% and 30% of what the government collects for reporting fraud committed against the government, such as fraud against the military, Medicare, or one of 20 federal agencies and programs. In each of these cases, the whistleblowers received rewards of over $50 million!

1. Tenet Heathcare: $900,000,000

In July 2006, Tenet Healthcare, a large chain of hospitals, paid $900 million to settle False Claims Act allegations that it committed fraud by manipulating of “outlier” payments to Medicare, paid kickbacks, upcoded DRG codes, and engaged in bill padding. The whistleblowers received rewards exceeding $150 million.

2. Eli Lilly: $800,000,000

In January 2009, Eli Lilly, a large pharmaceutical company, paid $800 million to settle allegations that it violated the False Claims Act and defrauded Medicare and Medicaid by “off label” marketing of a popular drug Zyprexa. The government alleged that Eli Lilly widely promoted the use of this drug to nursing homes patients to treat dementia, which is not an approved use by the FDA. The whistleblowers are eligible for up to 25% of the $800 million civil recovery or up to $200 million. The company also paid criminal fines of $615 million.

3. HCA The Healthcare Company: $731,400,000

In December 2000, after changing its name to “HCA The Healthcare Company” (formerly known as Columbia HCA), the largest for?profit hospital chain in the United States, settled its second False Claims Act case by paying $731,400,000 to resolve allegations of billing for lab tests that were not medically necessary or not ordered by physicians, upcoding, billing the government for advertising under the guise of “community education,” and billing for non?reimbursable costs incurred in the purchase of home health agencies around the country. The whistleblowers received $150 million. The company also paid more than $100 million in criminal fines.

4. Merck: $671,000,000

In February 2008, Merck & Company (a pharmaceutical company) has paid $671 million to resolve False Claims Act allegations that it failed to pay proper “rebates” to Medicaid under the Best Price statute and that it paid kickbacks to doctors. Under the Medicaid best price statute or rebate program, a pharmaceutical company is required to give Medicaid the same discount it gives its best customers. The three drugs involved were Zocor, Vioxx, and Pepcid. The whistleblowers are eligible for over $115 million.

5. HCA: $641,000,000

In June 2003, HCA Inc. (formerly known as Columbia HCA The Healthcare Company) paid the United States $641 million to settle False Claims Act allegations that it paid kickbacks to physicians and included unallowable cost in its annual cost reports. Combined with the December 2000 settlement, the government has recovered $1.7 billion from HCA. In this case, the whistleblowers received over $115 million.

6. Serono: $567,000,000

In October of 2005, Serono paid $704 million to settle a False Claims Act case involving Serostim, a human growth hormone product used to fight AIDS?related wasting. The fraud allegations included paying kickbacks to doctors and off label marketing of the drug. The whistleblower received over $50 million.

7. TAP [Taketa?Abbott Pharmaceutical] Pharmaceutical Products Inc.: $559,483,560

In October 2001, TAP Pharmaceutical Products Inc. paid $559 million to resolve False Claims Act allegations that it illegally gave kickbacks to doctors. It was alleged to have provided free samples with the understanding that doctors would bill Medicare and Medicaid $500 per dose. The whistleblower received $95 million.

8. Bristol?Myers Squibb Company (BMS): $515,000,000

In September 2007, Bristol?Myers Squibb (BMS) and its wholly owned subsidiary, Apothecon, Inc., paid over $515 million to settle False Claims Act allegations that it paid kickbacks, promoted off label use drugs, and violated Medicaid’s best price statute. The whistleblowers received $50 million.

9. Cephalon: $425,000,000

In November 2007, Cephalon, a biotech company, paid $425 million to settle False Claims Act allegations that it engaged in “off label” marketing of three FDA approve drugs: Actiq (a narcotic lollipop designed for pain control in cancer patients), Gabitril (an epilepsy medication), and Provigil (a narcolepsy medication). The company also paid a criminal fine of $50 million. The whistleblowers received rewards exceeding $55 million.

10. Abbott Labs: $400,000,000

In July 2003, Abbott Laboratories, Inc. paid $400 million to resolve False Claims Act allegations relating to the sale of “enteral” products, which pump food into the stomach of patients who cannot digest meals. The whistleblower received approximately $70 million.

Footnotes:

Outlier payments are an increased fee paid to hospitals over and above the normal DRG fee when they can show that their procedures are particularly difficult or complex.

Off label marketing occurs when a pharmaceutical company obtains FDA approval for a specific use of a new drug, but then asks doctors to prescribe it for other uses which it did not seek or obtain FDA approval. It is illegal for pharmaceutical companies to suggest to treating physician that they prescribe drugs for uses other than that which the FDA has approved.

The government has paid over $3 billion in rewards to whistleblowers for reporting fraud.



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Anamika Gupta asked:


Measuring Costs

Measuring profits or net income is the most important thing accountants do. The second most important task is measuring costs. Costs are extremely important to running a business and managing them effectively can make a substantial difference in a company’s bottom line.Visit at http://available-grants-money.blogspot.com

Any business that sells products needs to know its product costs and depending on what is being manufactured and/or sold, it can get complicated. Every step in the production process has to be tracked carefully from start to finish. Many manufacturing costs cannot be directly matched with particular products; these are called indirect costs. To calculate the full cost of each product manufactured, accountants devise methods for allocating indirect production costs to specific products. Generally accepted accounting principles (GAAP) provide few guidelines for measuring product cost.

Accountants need to determine many other costs, in addition to product costs, such as the costs of the departments and other organizational units of the business; the cost of the retirement plan for the company’s employees; the cost of marketing and advertising; the cost of restructuring the business or the cost of a major recall of products sold by the company, should that ever become necessary.

Cost accounting serves two broad purposes: measuring profit and furnishing relevant information to managers. What makes it confusing is that there’s no one set method for measuring and reporting costs, although accuracy is paramount. Cost accounting can fall anywhere on a continuum between conservative or expansive.  The phrase actual cost depends entirely on the particular methods used to measure cost. These can often be as subjective and nebulous as some systems for judging sports. Again accuracy is extremely important. The total cost of goods or products sold is the first and usually largest expense deducted from sales revenue in measuring profit.Visit at http://available-grants-money.blogspot.com

 



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Sheila Challiner asked:


Three years ago when David Elliot was told he had a brain tumour, life was never going to be the same again but after a life-saving operation his recovery has been good. Yet he lives with the knowledge that the tumour could re-occur at some stage in the next 10 years. He will also take tablets to reduce his epilepsy for the rest of his life.

Mr Elliot, who is now 41, thinks he is the “luckiest man alive” to have survived. But he can no longer obtain life insurance.

Mr Elliot and his wife have a two-year-old son, Jack, and last year they moved from London to Barnsley in Yorkshire. The family remortgaged 95,000 pounds with the Woolwich but David was not able to cover the debt with life insurance of his own.

“The Woolwich’s underwriters refused to give me life insurance cover. Jayne has life and critical illness cover for the entire mortgage,” he says.

The chances of getting life cover are especially unlikely if an application is made during the first three years of having been diagnosed with a nasty type of cancer or having had a heart attack. If the person makes a full recovery within a given period, usually up to five years, companies will consider insuring them again but apply a “loading” on to the policy. In some cases this can be as much as 10 times the premium that others pay.

For example, a male the same age who has a clean bill of health and wants decreasing cover life insurance over 25 years on a mortgage of 95,000 pounds would pay just over 12 pounds per month with Legal & General.

For the first four years after an operation, someone in Mr Elliot’s situation would be refused life insurance. After this period, life cover should be obtainable “but at a very high premium”.

After underwriting, a standard quote of 12 pounds per month could in fact rise to more than 150 pounds per month, although the additional premium wouldn’t necessarily last for the whole term of the policy. Insurers would only start to consider ordinary premiums after approximately ten years post operation and with a full recovery

The life company which underwrites for high-risk clients (those who practice extreme sports or with medical conditions) is the Special Risks Bureau (SRB). It claims to have a success rate of 70 per cent when placing its clients with insurers. SRB confirmed that it would be another year before they could consider an application from Mr Elliot.

Premiums would inevitably be heavy because of his epilepsy and because there would still be an increased mortality risk compared to the general population. Unless a policy specifically excluded cancers, Mr Elliot would almost certainly be refused any critical illness cover.

As a result of independent financial advice, the Elliot family has saved up six months’ emergency money, effectively a self-insurance policy.

And there is some good news for David. Alliance & Leicester, his previous mortgage lender, has allowed him to maintain 55,000 pounds of life cover from an existing policy - albeit at a cost of 45 pounds a month. This is called a Guaranteed Insurability Option (GIO) and means the insurance company will allow the insured up to half of the original amount assured without underwriting.

Anyone who needs help with these issues should contact SRB on 01245 491417 or specialrisksbureau.com or lifesearch.co.uk

It is not only serious medical complaints that can affect life insurance cover.

Justin Hopwood, media and marketing manager of Gloucester Rugby Club had his initial application declined because of a minor skin complaint. He and his wife are in the process of moving to a new home and they decided to buy life and critical illness insurance as part of the purchase.

“I have an unusual condition called Becker’s nevus which is nothing more than a slight discolouration of a small patch of skin. I was somewhat surprised when Scottish Provident announced they would not offer me cancer cover,” says Mr Hopwood.

Numerous visits to doctors and endless phone calls to Scot Prov eventually sorted things out. Mr Hopwood’s advice to anyone in the same situation is to make an application early and support it with a full copy of your medical history.



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Robert Rainer asked:


imbaugh the new Republican leader? It is high time to discuss the state of the U.S. economy, so, at the very least, to provide a greater degree of clarity on the issues at hand. The housing crisis is clearly the root of this possible economic meltdown. But if you recall, the entire fiasco began disguised as an endeavor to house every American. In fact, the American Dream of home ownership can be enjoyed by any and every American. Of course, this was also the battle cry of Republicans and of course the most infamous of them all, former President George W. Bush.

This initiative, disguised as the economic impetus to allow all to live the American dream, allowed Hattie Mae Johnson (our fictional African American Home Health Aide earning twenty five thousand dollars per year with a high school education) to purchase a $250,000 home. (Bear in mind that for every Hattie Mae Johnson, our fictional African American character, there are three Amber McCormicks, our white American fictional counterpart. Hence, the housing crisis does not have a pure racial bias.) Banks willfully financed Hattie’s loan and naturally the loan was approved since the mortgage broker suggested Hattie state $125,000 per year as her ‘Stated Income.’ Hattie’s mortgage and many others like hers were then packaged into exotic security stock options and sold to unwary European investors as golden investment opportunities.

Furthermore, clever mathematicians created intricate formulas to validate these European stock options as triple A — The most secure investment possible. Nonetheless, let us not forget that Hattie Mae’s loan is the principal component of the security option sold to unwary European investors. Hence, the cycle begins. Frenzied European investors smell opportunity in American Home securities. European money is thrown at American investment firms (Goldman Sachs) in unprecedented volume. Investment firms in turn throw money at mortgage brokers and banks providing home loans. The only focus was to build houses at break neck speed and fill them with anyone with a pulse to insure the continuation of the foreign investment revenue stream.

Well… guess what? Hattie’s adjustable rate mortgage ballooned to twice her salary. Hattie defaults on her loan. Secondly, the value of those exotic triple A security investments held by our friends in Europe begin to tank. European investors begin dumping their plummeting securities and the revenue stream dries up. American banks, now without an outside cash flow, stop lending money to consumers. The economy slides into the gutter. However, there is one more group of players in this drama. A small but insightful group of investors recognized the faulty foundation in which these securities were built. This same group of savvy investors purchased derivatives or insurance, primarily from the AIG (American International Group) Corporation, to be collected in the event of a decline in the security value.

Well, we all know the rest of the story. The securities tanked. The savvy derivative investors hit the jack pot and now AIG has to get bail out money to pay these same investors off. Now, President Obama comes on the scene. In every sense, he is now being handed a bag of cow dung as flour and not only asked to bake a cake, but, to also make certain that it has a wonderful flavor. Well, he can modify the loan so Hattie can afford to pay her mortgage — or he (the government) can buy Hattie’s home and charge her rent i.e. a modern day housing project. Clearly, this housing scheme rivals the magnitude of the Madoff ponzi scheme. But now that we’ve put the economic crisis in perspective, I think that it is imperative to offer pragmatic and sound solutions to this enormous challenge.

However, bear with me as I digress into a fictional story that may serve as both an analogy and window of opportunity to repair dysfunctional elements of our current economic system. There was once a Gynecologist that we will call Dr. Greedy. As Dr. Greedy poured over his monthly bills, he realized that his current income was insufficient to cover his mortgage, his child’s school tuition, and his wife’s Jaguar car payment. As he lay awake at night, pondering over possible ways to increase revenue, Dr. Greedy has an epiphany. He awakes his sleeping wife and says, “Honey, I’ve got it. I know how I’m going to double the amount of money that my medical practice is generating.” “How are you going to do that Bernie?” she replies. “I’m going to perform hysterectomies on everyone!” “Everyone!” she replied. “Yes, everyone. I will say that every woman has Endometrial Hyperplasia with Atypia which is a precancerous condition of the uterus and that will justify every hysterectomy that I perform.” “Well, don’t you have to biopsy the Uterus before the hysterectomy to prove that Endometrial Hyper thing you were saying?” replies his wife. “No, I’ve been on staff so long that I can just write it in as a ‘Stated Diagnosis’ and no one will follow up on it.” The next day Dr. Greedy implements his plan. Within two months, Dr. Greedy’s hysterectomy rate has increased 900%. Additionally, the pathology reports from the uterine specimens that Dr. Greedy has been removing all come back as normal with ‘No Evidence of Endometrial Hyperplasia With Atypia.’ Two months after initiating his plan, Dr. Greedy is called into the Gynecological Departmental Chairman’s Office. The Chairman said,” Bernie, a month and half ago I was very impressed with the fact that you were discovering an extraordinarily high amount of pathology in our community and treating it with surgical intervention, in effect, wiping out cancer. Additionally, I was also impressed by the additional patient and revenue flow to our hospital since we were revered for our disease detecting capabilities. However, News Channel 4 is outside our building with pathology reports claiming that you falsified the diagnosis of each and every surgery. Bernie you’re fired! Hand over your license.”

Our example brings to light the parallel between the housing markets branded campaign and Dr. Greedy’s superficial intent. Although Dr. Greedy’s true objective was to make money for himself, he touted his motive as an initiative to eradicate uterine cancer. Sound familiar? The housing crisis’ motif began as a campaign to allow every American to own their home. Falsified diagnoses and falsified incomes are consistent themes in both scenarios. (Despite our fictional story, there are legitimate means by which physicians may increase their income - read my book, “A Doctor’s Guide to Wealth”) This example also illustrates that inherent within the medical profession, certain fundamental oversights exists. In the absence of these basic oversights Dr. Greedy’s deeds would go unchecked.

So too must basic governmental oversight exist in today’s market economy. For starters, mortgage lenders must do away with ‘Stated Income’ loans and verify incomes based on annual tax return documents. Similarly, Dr. Greedy’s plan would have fallen short if he was required to submit presurgical tissue pathology results on each patient prior to a hysterectomy. Secondly, The Government, SEC, or some other ‘qualified’ agency must raise questions when the mortgage lending rates increase 900% as Dr. Greedy’s surgical rate did. These same agencies must improve their ability to designate triple A stock securities by not qualifying inferior products as triple A. This Governmental agency would in effect be equivalent to a departmental Chairman. Our government or any regulatory agency failed to raise inquiries in response to basic indicators, such as exploding home mortgage loan dispersion rates.

So, who is to blame in this current economic mess. Well for starters, the mortgage companies knowingly wrote bad loans. But the Investment CEO’s are first on the list since they collected loads of European cash which fueled the effort to create and package toxic American assets that were ultimately sold abroad to European investors. Government and regulating agencies were at fault for looking the other way. George W. Bush was infamous for saying that government should not “interfere with the free markets.” The mere sound of any oversight might be suggestive of an impairment of freedom. Nonetheless, our system is not irreparable. It needs only to be adjusted. Let’s save those facing foreclosure in order to circumvent our communities from ruin - both Hattie and our hysterectomy patients served as instruments to a larger scheme. They do not deserve to be made scapegoats. In the future, let’s give mortgages based on verified income variables as opposed to falsified ones. Lastly, let’s make the resulting stock securities have inherent worth reflective of the quality owner residing in each respective home and let’s label them appropriately, i.e. a triple A security is truly of superior merit. This will, subsequently, detoxify American assets and securities.

So, in closing, before we bash, criticize, or judge our newly elected president, let’s understand the enormity of the situation. But above all, particularly Republicans - Don’t root for President Obama to fail. A failing President Obama equates to a failing America - and last I checked, we’re all in this together.

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