Medicaid Fraud

In what looks like an effort to try to appeal to some Republican members of Congress, or at least one, President Obama’s health care proposal, released earlier today, takes aim at health care fraud.

Continuing its efforts on the False Claims Act front, the federal government announced today the first FCA settlement with a drug company that sought to charge the government for less than effective drugs. Under the agreement, Eon Labs Inc. will pay the U.S. $3.5 million to resolve FCA allegations relating to the company's drug Nitroglycerin Sustained Release (“SR”) capsules.

“Health Care Fraud” comes in this year as the sixth biggest Financial Fraud Law issue of the year. Why? Well, consider these items:

Not everyone was off for the holiday weekend yesterday. New York Governor David A. Paterson, whose extraordinarily low poll numbers suggest to many that he will not even run for the Democratic party nomination for governor next year, made some cuts to the state’s budget in an effort to close a $1.6 billion budget gap. We here at the Financial Fraud Law blog paid a lot of attention in particular to about 10 percent of Paterson’s cuts:

The state of New York and New York City have agreed to pay $540 million to settle allegations that they knowingly submitted, or caused to be submitted, false claims for reimbursement for school-based health care services, primarily speech therapy and transportation, provided to Medicaid eligible children from 1990 to 2001, according to the U.S. Department of Justice. The settlement is a record federal recovery by the Justice Department for the Medicaid Program.