Whistleblowers on front lines of fraud prosecutions

Pittsburgh, PA (September 27, 2015) - The accusation: A New Jersey company sold catheters meant to thread through veins to the very threshold of the heart, even though the company knew that they were prone to fraying and breaking "with grave complications," including emergency surgery.


That's how Dr. William St. John LaCorte, of Metairie, La., characterized the practices of C.R. Bard, Inc., in a lawsuit filed in 2011, and withdrawn this month. The case was one of 12 the internist has filed in 22 years using the False Claims Act, which allows whistleblowers to accuse others of defrauding the government, in return for a share of any ill-gotten gains that are recovered.


The act can help U.S. attorneys to find and penalize health care fraud. Its utility, though, depends largely on the limited manpower of federal prosecutors.


“The amount of fraud that occurs in America exceeds Congress’s willingness to fund the Department of Justice to the level it needs to adequately pursue those cases," said Patrick Burns, co-director of the Taxpayers Against Fraud Education Fund. "We don’t have the troops on the field to wage the war [on fraud], and we’re not making the proper investments to restore America’s stolen billions.”


When a whistleblower files a False Claims Act lawsuit, it remains under seal, often for years, while that district’s U.S. attorney reviews it. The U.S. attorney can intervene — placing government civil attorneys on the side of the whistleblower — or let the lawsuit to proceed without federal muscle. On rare occasions, prosecutors build criminal cases on whistleblower accounts.


When the U.S. attorney intervenes, the defendant often settles. From 2009 through 2014, health care-related cases in which a U.S. intervened generated $12.6 billion in settlements and judgments, versus $389 million in cases in which the whistleblower had to go it alone.


Whistleblower cases citing the act generated a record $2.6 billion in settlements and judgments from health care providers in 2013, but that declined to $2.2 billion in 2014.


The nation’s leading health care fraud prosecutor, U.S. attorney Wifredo A. Ferrer of Southern Florida, said the False Claims Act “plays a vital role in our efforts.” In June alone, his office settled two cases in which it had intervened. Hebrew Homes Health Network agreed to pay $17 million to settle a whistleblower’s allegation that it paid kickbacks to doctors who referred Medicare patients, and separately, Donald C. Proctor, Jr., M.D., paid $4 million to resolve a claim that he billed for unnecessary or fictitious skin cancer surgeries.


David Hickton, the U.S. attorney for Western Pennsylvania, helped a whistleblower in one health care case, recovering $2.5 million, while declining to back four other whistleblowers. This year Mr. Hickton’s office settled with two health centers that voluntarily reported false claims, for a total of $1.5 million.


In some districts, agents from the Department of Health and Human Services Office of the Inspector General regularly interview whistleblowers. There are no HHS agents, however, in Pittsburgh, despite Mr. Hickton’s calls to that department to reopen a local branch closed in 2007.


“When we do [health care] case here, we rely on somebody coming in from [HHS offices in] Harrisburg or Philadelphia,” said Downtown attorney Andrew Stone, who works False Claims Act cases.


“There’s been much more engagement [with the U.S. attorney here] than there was in the past, and there seems to be a commitment,” Mr. Stone said, “but we haven’t seen any big [health care] cases come through so far.”


In Dr. LaCorte’s case against C.R. Bard, the U.S. Attorney for Eastern Louisiana opted not to intervene. A judge dismissed parts of the complaint and limited discovery. Dr. LaCorte eventually gave up.


“We were asked to land on Normandy Beach,” he said, “with a pen knife.”


First Published September 27, 2015, 12:00am

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