Teva Pharmaceuticals to Pay for Medicaid Fraud

Teva Pharmaceuticals Agrees to Pay Settlement in Medicaid Fraud Case

medicare fraudTeva Pharmaceuticals Industries, Ltd, which manufactures generic drugs, recently agreed to pay $27.6 million to settle Medicare and Medicaid fraud charges that the company gave kickbacks to a Chicago psychiatrist to prescribe the pharmaceutical manufacturer’s generic antipsychotic, Clozapine.

The Medicaid fraud reportedly resulted in 100,000 fraudulent Medicaid and Medicare claims.

Teva agreed to pay $15.5 million to the federal government, and $12.1 to the state of Illinois. The whistleblower suit claimed that Teva Pharmaceuticals violated the False Claims Act by paying Chicago-area psychiatrist Michael Reinstein for nine years, beginning in August 2003, to prescribe generic antipsychotic Clozapine to his patients.

“Pharmaceutical companies must not be allowed to improperly influence physicians’ decisions in prescribing medication for their patients,” U.S. Attorney Zachary Fardon in Chicago said in a statement.

Regulators said that clozapine, and its brand name equivalent Clozaril, are effective for treatment-resistent forms of schizophrenia. However, they caution that it is a drug of last resort, especially for the elderly, because side effects can include seizures, inflammation of the heart, and potentially fatal decreases in white blood cells.

When a drug company like Teva encourages a doctor to prescribe such a medication, it can lead to over-prescribing and increase the risks of side effects and personal injury.

“Schemes such as the one alleged in this case undermine the health-care system and take advantage of vulnerable patients,” Stuart Delery, assistant attorney general for the department’s Civil Division, said in the statement.

It Is Important to Report Medicaid Fraud

Medicare and Medicaid are government-sponsored health care programs that help the needy and the elderly cover health care costs associated with aging and disability. These programs are hugely important for people living on a fixed income, so it is incumbent upon doctors to honestly report costs both to patients and to the government.

Unfortunately, not all health care providers are honest in their assessments. Some health care providers defraud the government, in violation of the False Claims Act, by overbilling for services, double billing, or billing for services not provided. The False Claims Act imposes liability on persons or corporations that defraud the government – and this includes doctors, hospitals, and nursing homes.

The False Claims Act provides protection for those who report agencies or individuals who are defrauding the government. These lawsuits are called whistleblower, or qui tam, lawsuits. Under the qui tam provision of the False Claims Act, the relator (plaintiff) files an action on behalf of the U.S. Government. The Act allows a wide variety of people and entities to file a qui tam action. The whistleblower must have first-hand knowledge of the fraud. However, as an incentive for reporting the fraud, whistleblowers are eligible for 15-25% of any recovered damages.

The Strom Law Firm Protects Medicaid Fraud Whistleblowers in South Carolina

Common whistle blower actions include:

  • Health care fraud, including Medicare and Medicaid fraud,
  • defense contractor fraud, and
  • other kinds of fraud.

Qui tam lawsuits have been, and continue to be, a very effective and successful tool in combating government procurement and program fraud.

If you have first-hand knowledge of government fraud occurring at your place of employment or your doctor’s office, including Medicaid fraud, the attorneys at the Strom Law Firm can help protect your rights. In order to help the government provide the best possible services, Medicare and Medicaid fraud must be reported as soon as possible. The attorneys at the Strom Law Firm understand the complexity of qui tam and whistleblower suits, and we offer free, confidential consultations to discuss the facts of your case. Contact us today.803.252.4800

About Pete Strom

Defending criminal charges including drug crimes, DUI, CDV, mail fraud, wire fraud, bank fraud, computer crimes, money laundering, and juvenile crimes, Pete also handles Federal and State investigations. Representing individuals in Civil Matters including Class Actions, Personal Injury, Qui Tam Actions, Defective Products, Nursing Home Neglect, and Professional Licensing Defense cases. Joseph Preston “Pete” Strom, Jr., the managing partner at Strom Law Firm, L.L.C., has been fighting for justice since 1984.

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