A couple of months ago, the Department of Justice announced a settlement with VMware, Inc. and Carahsoft Technology. The two companies specialize in providing virtualization software and information technology products to federal, state and local governments. The allegation against these two entities was that they did not provide their “best price” to the United States General Services Administration (GSA).
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The federal government provides many programs to aid socially or economically disadvantaged individuals or groups in obtaining business opportunities or projects. Some of those are well known and others are somewhat more obscure.
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The Department of Justice announced a settlement with nearly 500 hospitals related to the implantation of cardioverter defibrillators (ICD’s). The surgeries did not meet the appropriate medical conditions for Medicare coverage established in the National Coverage Determination (NCD). Medicare will generally exclude coverage for ICD procedures when a bypass or angioplasty has been performed within the last 90 days or within 40 days of a heart attack.
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A False Claims Act, pending in The United States District Court for the District of New Jersey against Allied Dental Practices of New Jersey and a number of individual dentists, has been settled. The complaint alleges that local Dentists Edward Poller, Glenn Prager, Christopher Emma, Todd Prager, and Daniel DiCesare instructed employees to “delete” all credit balances for the patients in their 22 locations in New Jersey and Pennsylvania. This complaint is one of the first cases settled under the New Jersey False Claims Act and is believed to be the first “whistleblower” case involving a novel allegation under the New Jersey Unclaimed Property Act. The complaint alleges violation of the Federal and New Jersey False Claims Acts. The defendants have agreed to pay over $420,000.00 including payment for the State and Federal false claims ($200,000), a penalty to the New Jersey Unclaimed Property Office ($75,000), a wrongful discharge settlement ($87,500) and all attorney’s fees. It is not known whether insurance companies will also seek reimbursement.
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New Jersey, like many other states, maintains a provision for paying over money or property to the State if it remains unclaimed for a period of time. Although the time can differ based upon the type of property, the limitation period can be as short as one year or as long as 20 years.
The technical term is “escheat”. This basically means that the property would revert to the State, in this case the State of New Jersey.
When you first take a look at the unclaimed property statute you would assume that it is effectively a “grab” by the State of New Jersey of unclaimed property. In fact, the statute was originally intended to, and continues to attempt to, protect the true owners of the property. After the property is turned over to the State, the State lists the property publicly to determine the true owner. If the property remains with the holder, not the State, there does not appear to be a strong incentive for the holder to find the actual owner and return the property.
You may be familiar with the unclaimed property provisions if you look online or at the lengthy advertisements in the newspaper listing all sorts of property by name and address. Who amongst us has not looked for our own name in the listing hoping to find money that is owed to us!
The question then becomes, what might this have to do with the False Claims Act?
A number of years ago, a Credit Union was alleged to have violated a statute similar to New Jersey’s. The Credit Union had hundreds of thousands of dollars in mortgage accounts that had not been properly handled. The individual that provided the information to the State was awarded nearly $150,000.00.
The Unclaimed Property Act covers things like actual money, casino chips, rental deposits, uncashed checks, utility deposits, and annuity or life insurance policy proceeds. If the company or business that you work for has not provided information to the State of New Jersey regarding property they are holding, you may have information that can be pursued under New Jersey’s False Claims Act.
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Recently, there have been a number of articles on the New Jersey School Construction Corporation. The original “SCC” was charged with building schools in areas of need. However, many years later we are left to wonder about the success of the program. Pundits say that hundreds of millions of dollars have been spent, with no real accounting. Supporters feel that schools have been completed in areas that might not have been otherwise helped.
The original “SCC” was abolished in 2007 and replaced by the School Construction Authority.
Governor Christie recently stopped payments on a Burlington County high school. The reason; the $27 million project was $17 million over budget. Where does all the money go? Some goes to acquiring property. However, in Gloucester City $13 million was spent acquiring 70 properties and no school has been built. In Camden, 34 properties were acquired and no school there either.
UPCODING AND OTHER HOSPITAL FRAUD
Over the past couple of weeks, the Federal Courts have passed on a spate of fraud allegations against hospitals. In the past, New Jersey hospitals have been hit with similar claims and, in fact, some New Jersey hospitals have settled with the Federal Government for these allegations of fraud. The claims allege what amounts to improper or inflated billing practices. The terms of art for inflated billing is “upcoding”. Upcoding is basically where the hospital bills for a procedure which may have been more intricate and provides for a larger reimbursement from the Federal Government. The “upcoding” refers to a different billing “code” that the Federal Government assigns to certain procedures. By submitting a claim for a more difficult or intricate procedure, the hospital is reimbursed a larger amount of money. Although there are variants on this upcoding issue, a qualified fraud attorney can explain the intricacies.
“Upcoding” can occur in hospitals as well as physician’s offices, nursing homes or, for that matter, dental offices and counselors’ offices. The upcoding can come in the form of billing for a more difficult procedure but it can also come in the form of billing for a longer procedure. For example, a false claim was brought against a counselor for billing for one-hour sessions when in fact the sessions were only lasting 45 minutes. After the fraud was reported, the investigators engaged in some simple math. The accumulation of the hours billed by the professional far exceeded that which was possible.
What the heck is a Compendium, and better yet, what the heck is the Compendium of Unimplemented Recommendations? AND how could it be used in New Jersey?
In March, 2011, the Department of Health and Human Services, Office of the Inspector General (OIG) issued its “Compendium of Unimplemented Recommendations”. On first blush, it is hard to imagine that any entity called the “Office of Inspector General” would issue a publication which outlines ways to save money or improve the programs that were not undertaken. However, a deeper analysis is necessary. The compendium outlines the implementation of cost savings or improvements which require either legislative, regulatory or administration action and, in some cases, more than one of the three actions are necessary.
The compendium covers Medicare, Medicaid and Public Health and Human Services as different parts of the compendium. The compendium, in the opening pages, makes a number of “priority recommendations.” The priority recommendations vary from non-monetary recommendations to suggestions that have estimated savings exceeding $3 billion. The recommendations also provide ideas for the Food and Drug Administration, the National Institutes of Health, the Indian Health Service, Medicaid and other federal entities.
A telecommunications company paid $16.5 Million for improper billing practices. Avaya, a New Jersey-based company, billed governmental agencies for telephone equipment that either didn’t work or had been replaced. A concerned individual brought the improper conduct to light. Under the Federal Whistleblower Statute, the individual will be paid for providing the information. Although it has yet to be announced, the amount paid to the person disclosing the information will exceed $ 3 million. If you know of improper billing practices like this, call us.
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