The False Claims Act has proven extremely successful in combating wasteful healthcare fraud. In fact, fiscal year 2014 proved so far to be the most lucrative year in terms of healthcare fraud settlements and verdicts. To trigger possible liability under the False Claims Act, a whistleblower must allege that certain state or federal regulations were violated by a government contractor, followed by submissions of invoices or claims for reimbursement. Hallmarks of healthcare fraud include violations of Medicare and Medicaid regulations including sub-standard care, overbilling for medically unnecessary procedures, or submitting claims for reimbursement for procedures that never occurred.
However, in today’s post, we explore False Claims Act liability involving a healthcare provider that violated the Food, Drug, and Cosmetic Act by importing certain drugs in violation of the Act’s terms.
Details of the case against Dickson Medical Associates
Tennessee-based Dickson Medical Associates describes itself as “one of the largest multi-purpose specialty groups in Middle Tennessee” and provides services ranging from express care to on-site diagnostic imaging. According to the allegations, a lone doctor at one of DMA’s dozens of locations obtained a generic version of the osteoporosis drug Reclast from an unapproved foreign source. The replacement drug, known as Aclasta, was not reviewed or approved by the FDA and is therefore not reimbursable under federal regulations. In fact, the FDCA expressly prohibits this sort of misconduct, and the violation of this statute served as the basis for the relator’s False Claims Act allegations.
The misconduct in question occurred for a number of years, allegedly from 2008 through 2012. According to the whistleblower’s allegations, Aclasta was never intended for distribution within the American market. What’s more, the majority of Aclasta bottles were not printed in English.
Dickson Medical Associates has not admitted any liability in the matter, and there have been no reports of any injuries as a result of the substitute medication. However, the False Claims Act is designed to address the potential for harm and the elimination of a patient’s freedom of informed choice that often occurs when healthcare professionals implement a financially-based fraud scheme.
In a statement by the U.S. Attorney’s Office, “The Food, Drug and Cosmetic Act and its enacting regulations exist to ensure the safety and efficacy of prescription drugs sold within the United States… The resolution set forth in this settlement agreement should send a clear message that this office will diligently pursue any violations of those laws.”
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