What Happens to My Employment Claims if I Decide to File a Qui Tam Case?

August 28, 2015 – This is an inquiry that comes up relatively often in qui tam cases. Often, when prospective clients tell us their stories, we see multiple actionable claims against the defendant. This may include employment claims such as discrimination, retaliation, wage and hour losses, alongside qui tam claims on behalf of the government. A basic difference between the two is that the employment claims belong to the individual relator while the qui tam claims belong to the federal and/or state government(s).

Simultaneous Parallel Litigation?

Simultaneous parallel litigation of both claims filed separately often causes problems due to the fact that employment actions tend to move more quickly through the court system than qui tam actions. Once discovery commences in the employment action and the relator is required to respond to inquiries from the defendant truthfully under oath, questions about other litigation and/or the qui tam case will be difficult to answer since typically the qui tam case will still be under seal. The relator may be able to get a court order to lift the seal for the narrowed purpose of answering discovery in the parallel employment case, but there is a chance that the Court may not grant the relator’s request.

Waiting to file the employment case after the qui tam case has resolved?

This option is generally disfavored. Qui tam cases take a long time to resolve and most states/employment statutes have a statute of limitations on the time period that an individual has to file a claim. By taking the risk of waiting for the qui tam case to resolve before pursuing the employment claims, the relator risks that he may be completely barred for failing to act quickly in bringing his claims forward.

Inclusion of Employment Claims in Qui Tam Case?

Likely, the most favorable option for the relator is to include his employment claims in the qui tam case. This avenue maintains and preserves both the individual’s employment claims and the government’s qui tam claims. Although the relator may grow frustrated by the fact that his employment claims also remain under seal while the government investigates its claims, it is of no consequence to the relator because the statute of limitation is tolled once the case is filed on his employment claims. It’s also more economic to have both claims filed together. This also lessens the difficulty that the relator may endure with regard to maintaining the seal when there is simultaneous litigation.

If you have knowledge of fraud being committed against the government and you are ready to blow the whistle, contact us by email, or call our attorneys at 800-226-9880 to learn how we can help you through the process.

Waters & Kraus is a national plaintiffs' firm that seeks to right the wrongs done to honest, hardworking people, including taxpayers who foot the bill for fraud against the government. This article was contributed by Louisa Kirakosian, an attorney at Waters & Kraus, in the firm’s Los Angeles office. She represents whistleblowers who have uncovered fraud against the government in the pharmaceutical, Medicare/Medicaid, and government contracting industries.

University of Phoenix Under Investigation by the Federal Trade Commission

August 17, 2015 — One of the largest for-profit colleges still in operation, the University of Phoenix, is being investigated by the government for allegedly deceptive marketing practices. The struggling school is facing a probe by the Federal Trade Commission (FTC) as to whether it engaged in deceptive marketing practices. As part of the investigation, the school must turn over documents regarding matters that includes its marketing, billing, tuition, accreditation, and military recruitment practices as far back as 2011. In response to this demand, the school’s parent company, Apollo Education Group, said, “Apollo is evaluating the demand and intends to cooperate fully with the FTC.”

Investigation Comes at a Time When the Government is Cracking Down on For-Profit Schools

The University of Phoenix is not the first for-profit school to be scrutinized by the federal government for education fraud. These for-profit colleges have long been criticized for leaving students with mountains of debt and no real job prospects. Regulators believes that some of these In schools pray on low-income students and veterans, encouraging them to take out expensive loans, and then use abusive tactics to collect repayment. New federal rules were enacted on July 1, 2015 to hold these schools responsible for students’ return on investment of their degree programs. This new set of rules, called “the gainful employment regulations,” requires colleges to track their graduates’ debt and employment to prove their programs do not fall short of federal guidelines. Schools must now provide information on program costs, how much students earn after graduations, and how much debt they accumulate. This will let the Department of Education see which programs are saddling students with debt and leaving them with no real job prospects, and which offer affordable training that leads to gainful employment.

Department of Education Secretary Arne Duncan said the following about some of the tactics of some for-profit colleges, “There are too many [institutions that] have been morally unconscionable and what they’ve done…Too many of these guys took advantage. People have been taking out these big loans, ending up in a worse financial situation than when [they] start. Nobody signs up for that.”

Waters & Kraus has experience handling whistleblower cases against for-profit colleges. If you know of fraudulent or deceptive practices performed by any of these institutions, contact us or call our qui tam attorneys at 800.226.9880 to learn more about our practice and how we can work together to notify the government about fraudulent abuses of government-funded programs.

This article was contributed by Anne Izzo one of the qui tam attorneys in the firm’s Dallas office.

NuVasive Inc. Pays $13.5 Million to Settle Whistleblower Case

August 10, 2015 — Kevin J. Ryan, of Frederick, MD, a former sales agent for NuVasive Inc., a medical device company, was awarded $2.2 million for blowing the whistle on NuVasive for off-label marketing. Specifically, Ryan accused his former employer NuVasive of marketing its spinal treatment device for surgical uses that were not approved by the U.S. Food and Drug Administration (FDA) and for “improperly inducing doctors to treat patients with it at several Maryland hospitals,” including Johns Hopkins, St. Agnes, Montgomery General and Howard County General.

The case alleged that between 2008 and 2013, NuVasive promoted the use of the CoRoent System for surgical uses that were not approved by the FDA, including for use in treating severe scoliosis and severe spondylolisthesis, two severe spine deformities. As a result of this conduct, the case alleged, NuVasive caused healthcare providers and hospitals to submit false claims to government health care programs for spine surgeries that were not eligible for reimbursement.

The settlement also resolves allegations that NuVasive knowingly paid illegal remuneration or kickbacks to physicians to induce them to use the CoRoent System in spine fusion surgeries, in violation of the federal Anti-Kickback Statute. This illegal remuneration included promotional speaker fees, honoraria, and paid expenses relating to physicians’ attendance at events sponsored by the Society of Lateral Access Surgery (SOLAS). According to case documents, SOLAS was created, funded, and operated solely by NuVasive, despite its appearance of being an independent third party. The company settled the case by paying $13.5 million to the federal government.

In response to this whistleblower lawsuit, the U.S. Attorney for the District of Maryland, Rod J. Rosenstein said, “Health care providers need to be free to make medical decisions without improper influence by material or incentives from manufacturers. A medical device manufacturer violates the law if it knowingly causes physicians to use its products for purposes that are not medically reasonable and necessary and to bill federal health insurance programs.”

False Claims Involving Off-Label Use and Kickbacks are a National Problem

False claims made by medical device and pharmaceutical companies are a serious national problem. First, these claims can involve adverse effects or useless treatments. In addition, they often cost the patient and the public at large amount of money. For example, in the NuVasive case, federal government programs such as Medicare and Medicaid were improperly billed and paid out millions of dollars for “off-label” treatments involving the CoRuent System, which was designed to treat minor conditions affecting certain sections of the spine. The government case alleged that instead the company marketed the system for severe deformities of the spine, including scoliosis, for which it had not been approved.

When a company promotes a product for off-label use, specifically where such use is unapproved, its benefits unproven, and it is being promoted by Big Pharma to enhance sales and increase profits, it can be both immoral and illegal. That’s where the False Claims Act can be useful. Under the False Claims Act, these companies can be investigated for fraud by the Department of Justice and held accountable if such fraud is substantiated.

As Special Agent Nick DiGuilio of the U.S. Department of Health and Human Services, Office of the Inspector General said, “Defrauding Medicare and Medicaid by paying kickbacks to physicians and promoting uses not covered by federal health care programs will not be tolerated. Settlements such as the one entered into today by NuVasive send a message to the medical device industry that such practices will be closely monitored.”

While Waters & Kraus is not handling this particular False Claims Act case, we are representing whistleblowers in similar lawsuits. If you have comparable claims against a different pharmaceutical or medical device company, contact us or call our qui tam attorneys at 800.226.9880 to learn more about our practice and how we can work together to notify the government about fraudulent abuses of government-funded programs.

This article was contributed by Anne Izzo one of the qui tam attorneys in the firm’s Dallas office.

Most Effective Tool to Combat Fraud

Praising Whistleblowers  on the 237th Anniversary of America's First Whistleblower Law

August 3, 2015 — In a recent statement, Senator Chuck Grassley marked the 237th anniversary of the first whistleblower law with praise for the False Claims Act (FCA) and the whistleblowers (also called “relators”) who have made it so successful. 

As explained by the Department of Justice, which is charged with investigating whistleblower complaints under the FCA,  

The False Claims Act is the government’s primary civil remedy to redress false claims for government funds and property under government contracts, including national security and defense contracts, as well as under government programs as varied as Medicare, veterans’ benefits, federally insured loans and mortgages, transportation and research grants, agricultural supports, school lunches and disaster assistance.

   

Under the False Claims Act, whistleblowers with knowledge of fraud, waste, or abuse affecting the public fisc may file a lawsuit on behalf of the United States; may litigate the action; and may share in the funds recovered for the United States. 

The FCA may not be the oldest whistleblower law, but it is the most successful: False Claims Act cases have returned almost $23 billion to the federal fisc since 2009, and in 2014 alone, almost $6 billion was recovered by the government under the Act. As noted by Senator Grassley, this success is in large part attributable to whistleblowers who have been empowered to come forward, protected from retaliation, and rewarded for their assistance thanks to the amendments he authored in 1986 and 2009. With this in mind, Senator Grassley urged his colleagues to strengthen, not weaken, relators’ rights, and to “stay vigilant” on behalf of whistleblowers.

Report Fraud Against the Government

If you have knowledge of fraud being committed against the government and you are ready to blow the whistle, contact us by email, or call our attorneys at 800-226-9880 to learn how we can help you through the process. 

Waters & Kraus is a national plaintiffs' firm that seeks to right the wrongs done to honest, hardworking people, including taxpayers who foot the bill for fraud against the government. This article was contributed by Caitlyn Silhan one of the qui tam attorneys in the firm’s Dallas office.