Our Clients

United States ex rel. Fesenmaier v. The Cameron-Ehlen Group d/b/a Precision Lens and Paul Ehlen

Practice Area: Healthcare
Result: Jury verdict finding single damages of $43,694,641
Court: United States District Court for the District of Minnesota

A federal jury found The Cameron-Ehlen Group d/b/a Precision Lens, a distributor of intraocular lenses and other products used in cataract surgeries, and Paul Ehlen, who was a majority owner of Precision Lens, jointly liable for causing the submission of 64,575 false claims to Medicare, resulting in single damages of $43,694,641. Our client, Kipp Fesenmaier (who is a former employee of Sightpath Medical, a company that worked with Precision Lens and Ehlen to provide kickbacks), alleged that the defendants caused the submission of false claims to the Medicare program by providing kickbacks (such as lavish trips, private flights, tickets to sports events and other entertainment, and discounted Delta SkyMiles) to ophthalmologists in order to induce those doctors to use Precision Lens products in cataract surgeries reimbursed by Medicare. Mr. Fesenmaier filed his complaint in November 2013, and after the government investigated his allegations, the United States intervened in the case in February 2018. Morgan Verkamp, on behalf of Mr. Fesenmaier, supported the government’s investigation and litigated the case (through presentation of a seven-week jury trial) as co-counsel with the United States. Morgan Verkamp’s press release concerning the verdict can be read here, and the government’s press release can be found here.

United States ex rel. Wallace v. Inform Diagnostics,
Inc.

Practice Area: Healthcare
Result: Settled in 2022 for $16,000,000
Court: United States District Court for the District of Massachusetts

Inform Diagnostics, Inc., formerly known as Miraca Life Sciences, Inc., is a nationwide provider of clinical pathology laboratory services that has pathology labs around the country. Our client, Dr. Christopher Wallace (a former pathologist at Inform), alleged that Inform submitted false claims to federal healthcare programs, like Medicare, for medically unnecessary laboratory testing by automatically and systematically running additional tests, including special stains, without a treating physician’s knowledge, consent, or order and without a pathologist’s determination of medical necessity. After the government investigated Dr. Wallace’s allegations, the case settled for $16,000,000. The settlement agreement can be found here.  Morgan Verkamp’s press release concerning the settlement can be read here, and the government’s press release can be found here.

United States ex rel. LPF, LLC v. Miraca Life Sciences, Inc. N/K/A Inform Diagnostics

Practice Area: Healthcare
Result: Settled in 2019 for $63,500,000
Court: United States District Court for the Middle District of Tennessee

Miraca is a nationwide provider of clinical pathology laboratory services that has pathology labs around the country. Those labs receive tissue or fluid samples from physicians, analyze the samples for disease, and report the results back to the doctor. The federal government has in recent years developed a variety of incentive programs whereby healthcare providers receive payments for meeting certain quality metrics and criteria regarding the use of software for electronic health records. Our client, a business entity with both insider and competitor knowledge, alleged that Miraca exploited these programs to impermissibly secure referrals of government healthcare business by offering inducements to physician practices. The kickbacks took the form of, among other things, free or below-fair-market-value training and consulting on software developed by Miraca’s business partner. Our case was the second of three kickback qui tams filed against Miraca, and Miraca reached a global settlement in 2019 for $63,500,000.

United States ex rel. Luke v. HealthSouth

Practice Area: Healthcare
Result: Settled in 2019 for $4,000,000
Court: United States District Court for the District of Nevada

The complaint in this case alleged that HealthSouth, the largest provider of inpatient rehabilitation services in the country, falsified information regarding the severity of its patients’ conditions in order to justify overcharging Medicare. The complaint alleged that the conduct was occurring at HealthSouth’s rehabilitation hospital in Henderson, Nevada. The government did not intervene in the case, and Morgan Verkamp litigated the matter for more than a year. The case settled for $4,000,000 in 2019.

United States ex rel. IIRT, LLC v. Sightline Health/ION

Practice Area: Healthcare
Result: Settled in 2018 for $11,800,000 with corporate defendants and one individual defendant; in ongoing litigation with remaining defendants
Court: United States District Court for the Northern District of Texas

Sightline Health LLC operates radiation therapy centers throughout the United States. In an effort to increase the referrals of cancer patients to its radiation clinics, Sightline bribed prominent urologists to refer their prostate cancer patients for beam radiation therapy in place of more favorable therapies by setting up arrangements which financially benefited the physicians based on the volume of their referrals. In early 2018, IIRT’s claims against Sightline were settled for $11,500,000. As part of the settlement, Sightline, Integrated Oncology Network Holdings LLC (which acquired Sightline in 2011), and several related entities were also required to enter into a five-year Corporate Integrity Agreement.

In June 2020, Relator IIRT settled with former Sightline Health CEO TJ Farnsworth for $300,000. A key part of Mr. Farnsworth’s settlement is a cooperation clause in which he is bound to fully cooperate with continuing prosecution of this case and any matters that relate to the same conduct by Sightline Health/ION. The case is continuing against the remaining individual defendants.

United States ex rel. Fesenmaier v. Sightpath Medical, Inc. et al.

Practice Area: Medical Device
Result: Settled in 2017 for $14,900,000 with two defendants; in ongoing litigation with remaining defendants
Court: United States District Court for the District of Minnesota

Kipp Fesenmaier alleged that Sightpath, a distributor of intraocular lenses used in cataract surgeries, illegally incentivized ophthalmologists to use its products. In August 2017, the United States reached an agreement with Sightpath Medical, TLC Vision, and their former CEO James Tiffany to pay more than $12,000,000 related to the kickbacks. Sightpath also entered into a five-year Corporate Integrity Agreement with the Office of Inspector General.

In February 2018, a North Carolina eye surgeon agreed to pay $2,900,000 to resolve allegations relating to receipt of kickbacks provided by Sightpath.

The case remains in litigation, with trial expected in 2020.

United States ex rel. Emanuele v. UPMC Hamot and Medicor Associates

Practice Area: Healthcare
Result: Settled in 2017 for $20,750,000
Court: United States District Court for the Western District of Pennsylvania

Dr. Tulio Emanuele is a cardiologist who worked for Medicor Assoc. in Erie, PA from 2001 to 2005. During his tenure, Dr. Emanuele determined that a local hospital, then called Hamot Medical Center and now named UPMC-Hamot, was offering Medicor’s physicians sham directorships and other illegal kickbacks to induce the physicians to refer Medicor’s Medicare patients to Hamot for costly cardiac procedures. Morgan Verkamp joined Dr. Emanuele’s trial team in 2017 and immediately began intensive preparations for an expected six-week trial. The trial team won several critical pre-trial motions in the days leading up to trial. The case settled the night before jury selection, with Hamot and Medicor agreeing to pay $20,750,000. Dr. Emanuele received a 29% relator’s share.

United States ex rel. Meyer v. Kempf Surgical Appliances, Inc.

Practice Area: Medical Devices
Result: Settled in 2015 for $1,000,000
Court: United States District Court for the Southern District of Ohio

Relator Scott Meyer was a certified orthotist. This case, filed in Cincinnati, was brought against his former employer for a variety of practices relating to improper charges for custom orthotics and other medical devices, and for retaliating against him when he tried to address issues internally. The case was settled for $1,000,000, with $600,000 in settlement of the allegations concerning improper charges and an additional amount in settlement of the relator’s retaliation claim.

United States ex rel. Lovett & Mayhew v. Holzer Clinics, Inc.

Practice Area: Healthcare
Result: Settled in 2015 for $846,000
Court: United States District Court for the Southern District of Ohio

Holzer Clinic is more than one hundred years old and one of the largest employers in southeastern Ohio. But in 2013, two of its employees – Laura Lovett and Lisa Mayhew – discovered that Holzer used coding methodology that systematically resulted in upcoded claims for Medicare and Medicaid patients. Morgan Verkamp litigated the case after the government’s declination, and, in March 2014, defeated the defendants’ motion to dismiss. In November 2015, Holzer Clinic agreed to pay the United States $846,000, of which the relators received 28.75%.

United States ex rel. Beaujon v. Hebrew Homes Health Network, Inc.

Practice Area: Healthcare
Result: Settled in 2015 for $17,000,000
Court: United States District Court for the Southern District of Florida

Relator Stephen Beaujon was the Chief Financial Officer for one of Florida’s largest nursing home networks, Hebrew Homes, when he discovered that his company was offering physicians illegal kickbacks in exchange for patient referrals – a scheme that Mr. Beaujon alleged in his lawsuit was largely orchestrated by the company’s president, William Zubkoff. The United States did not intervene in the case, which ultimately settled for $17,000,000, at the time, the largest settlement paid by a nursing home for violations of the Anti-Kickback Statute. Hebrew Homes also entered into a Corporate Integrity Agreement that required the company to change its policies and allowed the government to more closely monitor the company’s actions. Access the Department of Justice’s press release here to learn more. For the Corporate Integrity Agreement, click here.

United States ex rel. Daugherty v. Bostwick Laboratories & David Bostwick

Practice Area: Healthcare
Result: Settled in 2014 and 2015 for $6,000,000 and $4,000,000, respectively
Court: United States District Court for the Southern District of Ohio

An independent medical laboratory can apply for reimbursement through federally funded healthcare programs when a physician sends the laboratory samples from beneficiaries of those government programs. Usually, only tests that are ordered by the referring physician are eligible for reimbursement. In this case, our client, Michael Daugherty, revealed how Bostwick Laboratories was performing additional, expensive testing on some samples “reflexively” – that is, without the knowledge or consent of the physician who ordered the original test – and then accepting reimbursement for these tests from the government. In addition, Bostwick Labs allegedly offered illegal kickbacks to physicians in order to obtain referrals for the unnecessary testing. In the end, Bostwick Labs settled this case for over $6,000,000 (access the press release here). Over a year later, Dr. David Bostwick settled the claims asserted against him for up to $3,750,000. Morgan Verkamp’s press release regarding that settlement can be found here, and the Department of Justice’s release can be found here.

United States ex rel. Howard & Wilson v. Lockheed Martin Corp.

Practice Area: Procurement
Result: Settled in 2014 for $6,600,000
Court: United States District Court for the Southern District of Ohio

In a case spanning more than fifteen years, Morgan Verkamp’s clients took on defense contracting giant Lockheed Martin to challenge the quality of work on F-22 fighter planes purchased by the Air Force. In 1999, the relators alleged that Lockheed and five subcontractors repeatedly billed the United States for defective tools associated with a contract to design and manufacture new jet fighters. Following extensive discovery, four relators reached a settlement with Lockheed Martin for $6,600,000.

United States ex rel. Lankford v. MPRI, Inc.

Practice Area: Procurement
Result: Settled in 2014 for $3,600,000
Court: United States District Court for the Southern District of Ohio

The Department of Defense entered into a contract with MPRI to provide support to U.S. troops serving in Afghanistan. Under the contract, the government agreed to pay MPRI hourly for the actual performance of the services. However, MPRI systematically charged the government for time that its employees were not working on the contract, but rather were on vacation or traveling to and from their vacations. Relator Scott Lankford, an employee at MPRI, spoke to his superiors about the concerns this raised but was ultimately ignored. His qui tam action resulted in a settlement totaling more than $3,000,000. Click here to read the Department of Justice’s press release.

United States ex rel. Gale v. Omnicare, Inc.

Practice Area: Healthcare
Result: Settled in 2014 for $124,000,000
Court: United States District Court for the Northern District of Ohio

The federal Anti-Kickback Statute forbids anyone from offering financial inducements (or “kickbacks”) to procure services that can be reimbursed by a federal healthcare program, such as Medicare or Medicaid. Relator Donald Gale revealed a kickback scheme carried out by Omnicare, one of the largest pharmacies in the United States. According to Mr. Gale, Omnicare had been offering steep discounts to institutional providers who were treating patients covered under Medicare “Part A” (which temporarily provides reimbursements on a per diem basis) in order to capture business for patients covered under all other government healthcare services. Our firm was prepared to present this case to a jury when, on the eve of trial, Omnicare offered to settle the case. The resulting agreement required Omnicare to return $116,000,000 to the government, over $17,000,000 of which was awarded to Mr. Gale for his services in uncovering the alleged scheme. The Department of Justice issued a press release, which can be accessed here, and Morgan Verkamp’s press release case be found here.

United States ex rel. Epp v. Supreme Foodservice AG

Practice Area: Procurement
Result: Settled in 2014 for $101,000,000 as part of $434,000,000 overall recovery
Court: United States District Court for the Eastern District of Pennsylvania

This case involved the inflated billing practices of a company that had contracted with the United States to distribute food and other items to U.S. military locations in Afghanistan. The company, known as Supreme Foodservice AG, allegedly used a variety of mechanisms to fraudulently represent the costs of its services, including (a) the use of a fictional middleman to artificially markup its prices, (b) the inflation and misrepresentation of shipping costs, (c) the practice of knowingly charging the United States more than it paid for items it held in stock, and (d) the failure to notify or give the government the benefit of “discounts” negotiated between Supreme and its subcontractors. Relator Michael Epp was a Director at Supreme when he voiced his concerns over the company’s questionable practices, after which he was suspended and eventually terminated for acting in a manner inconsistent with the company’s “ethics.” Supreme pled guilty to Major Fraud against the United States and settled Mr. Epp’s allegations for $101,000,000. The Department of Justice’s press release can be found here.

United States ex rel. Hansson v. CONAX

Practice Area: Procurement
Result: Settled in 2013 for $2,000,000
Court: United States District Court for the Southern District of Ohio

This case involved the fraudulent sale of military components to the United States Department of Defense. The components were manufactured by Cobham PLC and its wholly owned subsidiaries CONAX Florida and H. Koch & Sons Company. Relator Mark Hansson, who was employed by CONAX, notified his superiors that the components suffered from potentially fatal deficiencies and had failed to pass the rigorous testing required for sale to the U.S. military. Despite these concerns, the company decided to conceal the components’ deficiencies and continue with their sale, rather than suffer the financial burden of scrapping or fixing them. In some cases, the company conducted fraudulent testing in front of government officials to “prove” that their products could pass muster. As a result of the company’s failure to address these issues and its active participation in what he saw as a scheme to defraud the government, Mr. Hansson resigned from his position and initiated this qui tam action. Almost five years later, the defendants settled the case for over $2,000,000. Read the Department of Justice’s press release here.

United States ex rel. Hutcheson v. Blackstone Medical, Inc.

Practice Area: Medical Devices
Result: Settled in 2012 for $30,000,000
Court: United States District Court for the District of Massachusetts

Blackstone Medical manufactured surgical devices that were used in spinal surgeries. While working for Blackstone, Relators Susan Hutcheson and Philip Brown uncovered a scheme through which Blackstone offered illegal inducements (“kickbacks”) in order to persuade surgeons to use Blackstone’s products. These kickbacks came in many forms, the most common of which were sham consulting agreements that paid surgeons up to $8,000 each month. Blackstone also offered expensive grants, travel, entertainment, and other illegal incentives to physicians as a quid pro quo for using their products.

Initially, the district court dismissed the case because it did not believe that the hospitals that were submitting claims for the medical equipment had an obligation to ensure that Blackstone Medical was complying with the Anti-Kickback Statute. But the First Circuit Court of Appeals reversed the district court’s dismissal, holding that the hospitals’ provider agreements did, in fact, precondition payments on the integrity of the underlying transaction, and that their provider agreements made clear that “the federal Medicare program will not pay claims if the underlying transaction that gave rise to the claim violated the AKS.” Click here to read the decision, which was a huge win for relators everywhere. Ultimately, Blackstone settled the case for $30 million. Read the Department of Justice’s press release here.

United States ex rel. Galmines et al. v. Novartis Pharmaceuticals

Practice Area: Pharmaceutical
Result: Texas settlement in 2012 for $19,900,00; federal settlement in 2016 for $35,000,000
Court: United States District Court for the Eastern District of Pennsylvania

Relator Don Galmines was a sales representative for Novartis Pharmaceuticals during the company’s campaign to market Elidel, a topical cream that was used to treat eczema. Because Elidel worked by affecting patients’ immune systems, the FDA approved Elidel for use in patients over the age of two when conventional eczema treatments had either failed or were inadvisable. However, Novartis undertook a massive marketing campaign to promote Elidel’s long-term use in infant populations and to convince prescribing physicians that Elidel was to be used as a first-line treatment. The resulting widespread off-label uses of the drug prompted the FDA to brand Elidel with a “black box” that clarified the drug’s indication. Novartis reached an agreement with Texas to settle its state-based claims for $19,900,000 in 2012. Read Morgan Verkamp’s press release for that settlement here. In 2016, Novartis entered into a settlement to resolve the remainder of the claims for an additional $35,000,000. 

United States ex rel. Collins v. Lifewatch Corp.

Practice Area: Healthcare
Result: Settled in 2012 for $18,500,000
Court: United States District Court for the Southern District of Ohio

Morgan Verkamp’s client was a sales representative for LifeWatch Services, Inc., a remote heart-monitoring company based in Rosemont, IL. During her time at LifeWatch, the client came to learn that the company was billing Medicare for ambulatory cardiac telemetry (“ACT”) services by using false diagnostic codes to get the services reimbursed. She also determined that LifeWatch was providing full-time employees to hospitals and medical practices as kickbacks to induce the hospitals and practices to refer Medicare patients for ACT services. One practice went so far as to request that LifeWatch employ the physician’s sister-in-law, who was unqualified for the position, and LifeWatch complied to ensure it would get the business. The United States intervened in the case and reached an $18,500,000 settlement in March 2012. LifeWatch was also required to sign a five-year Corporate Integrity Agreement that required the CEO and other corporate executives to personally certify compliance with strict oversight requirements. Morgan Verkamp’s client and another relator shared a $3,400,000 relator’s share award.

United States ex rel. Austin & Montgomery v. Novartis Pharmaceuticals

Practice Area: Pharmaceutical
Result: Settled in 2010 for $237,000,000
Court: United States District Court for the Eastern District of Pennsylvania

Jim Austin and John Montgomery were employed as pharmaceutical sales representatives at Novartis – one of the world’s largest pharmaceutical companies – when they uncovered the company’s marketing scheme intended to promote the anti-epilepsy drug Trileptal for uses not approved by the FDA. These unapproved uses included treatment of bipolar disorder and various other types of neuropathic pain. Other evidence revealed that Novartis had also paid kickbacks to the physicians in order to induce off-label prescriptions. As a result, it was estimated that over half of Trileptal prescriptions were for the treatment of neurological disorders that Trileptal was not approved to treat. Novartis ultimately settled the case for over $237 million – $24 million of which was paid to the relators for their efforts in uncovering the alleged fraud. Click here to read the press release.

United States ex rel. Pogue v. Diabetes Treatment Centers of America

Practice Area: Healthcare
Result: Settled in 2009 for $28,000,000
Court: United States District Court for the Middle District of Tennessee (later transferred to the United States District Court for the District of Columbia)

This case alleged that the defendant Diabetes Treatment Centers of America (“DTCA”) violated the False Claims Act by offering illegal kickbacks to physicians in return for patient referrals. DTCA operated diabetes treatment centers in hospitals across the nation and recruited physicians to act as “medical directors.” In reality, this meant that DTCA would pay physicians for referring their patients to DTCA’s treatment centers. The claims to Medicare and Medicaid, however, were ultimately submitted by the hospitals in which DTCA operated. While this case settled for $28,000,000, its effect as legal precedent is perhaps its greatest legacy.

Initially, the district court dismissed the case for failing to establish that any of the claims were “false.” The decision relied on the fact that the claims were submitted not by DTCA itself, but by the hospitals in which DTCA operated. Upon reconsideration, however, the court vacated its earlier decision and held that a person may violate the FCA based on the theory of “implied certification.” Under this theory, a claim may be considered false if it is based on actions that violate laws or regulations so important to the government that, had the government been aware of the violations, it would not have paid the claim. The court therefore allowed the case to proceed based on the underlying allegations of improper influence, even though the claims made to the government truthfully represented the services being performed. This case helped set into motion the now well-established theory that an underlying violation of the Stark Law or Anti-Kickback Statute may form the basis of a qui tam action under the False Claims Act.

Click here to read the District Court’s reconsideration decision, or here to read the often-cited D.C. Circuit’s discussion and affirmation of that decision after the case was transferred.

United States ex rel. LeFan et al. v. The General Electric Company

Practice Area: Procurement
Result: Settled in 2006 for $10,000,000
Court: United States District Court for the Western District of Kentucky

This product substitution case involved jet engine parts manufactured at GEAE’s Madisonville, Kentucky Turbine Airfoil plant. “Product substitution” is a term which refers to cases where the contractor promised to provide one thing, but is alleged to have provided another. The case was investigated by a large cast of DOJ attorneys and investigators from the Defense Criminal Investigative Service, the Air Force Office of Special Investigations, the Army Criminal Investigations Division, and the Naval Criminal Investigative Service. The United States intervened in the case, and the qui tam allegations were settled in 2006 for over $10,000,000. Read the press release for the settlement here. In January 2008, the district court awarded almost $2,200,000 in attorney fees. General Electric appealed that order, but the Sixth Circuit Court of Appeals affirmed the decision. Click here to read that decision.

United States ex rel. Gonter v. Hunt Valve Company

Practice Area: Procurement
Result: Settled in 2006 for $13,000,000
Court: United States District Court for the Northern District of Ohio

 

United States ex rel. Roby v. The Boeing Company­

Practice Area: Procurement
Result: Settled in 2000 for $61,500,000
Court: United States District Court for the Southern District of Ohio