City of Los Angeles to Pay $38.2 Million to Resolve FCA Suit

City of Los Angeles to Pay $38.2 Million to Resolve FCA Suit

The City of Los Angeles has agreed to pay $38.2 million to resolve allegations that it knowingly sought and used the US Department of Housing and Urban Development (HUD) grant funds for multifamily affordable housing without meeting federal accessibility requirements, in violation of the False Claims Act (FCA).

HUD provides grant funds to municipalities, including the City to support efforts to build and rehabilitate affordable multifamily housing units. To lawfully obtain federal housing development funds, recipients like the City must comply with federal accessibility laws such as the Americans with Disabilities Act, the Fair Housing Act, and Section 504 of the Rehabilitation Act, which prohibit discrimination against people with disabilities in activities receiving federal financial assistance. For example, 5% of all units in HUD-assisted multifamily housing must be accessible for people with mobility impairments, and 2% of units must also be accessible for people with visual and auditory impairment. Recipients of federal aid must also maintain a publicly available list of accessible units that describes their accessibility features and ensure that individuals who need these accessibility features are the ones that occupy those units.

In 2017, the United States intervened and filed a complaint in a whistleblower FCA action, US ex rel. Ling, et al. v. City of Los Angeles, et al., No. 2:11-CV-00974 (C.D. Cal.), which was brought by a city resident and the Fair Housing Council of San Fernando Valley, a nonprofit disability rights advocacy group. The lawsuit alleged that the City’s multifamily properties systematically failed to follow federal accessibility laws by having structural failures such as slopes that were too steep, counters that were too high, and access points that did not accommodate wheelchairs. The lawsuit further alleged that the City’s housing programs were inaccessible to people with disabilities because the City failed to maintain a publicly available list of accessible units and their accessibility features. Despite these failures, the United States alleged that the City obtained grant funds by knowingly and falsely certifying to HUD on an annual basis that it complied with these grant requirements. This settlement resolves the pending lawsuit. The relators’ shares of the settlement have not yet been determined.

Read the press release here.

St. Peter’s Health Settles FCA Civil Suit for $10.8 Million

On August 27, the US Attorney for the District of Montana announced a settlement with St. Peter’s Health, a nonprofit health care system located in Helena, Montana. St. Peter’s agreed to pay $10,844,201 to resolve allegations that it violated the FCA by submitting false claims for services performed by Dr. Thomas Weiner, an oncologist employed at its cancer treatment center, to federal health care programs.

Per the settlement agreement, St. Peter’s allegedly knew, or should have known, that Dr. Weiner submitted claims for office visits that were coded at a higher level of service than was actually performed, and claims for office services that were not sufficiently separate from the chemotherapy administered on the same day. The settlement agreement further indicates that St. Peter’s paid Dr. Weiner with a salary inconsistent with fair market value because his compensation was based on the false claims.

Despite the conduct detailed in the settlement agreement, the agreement credits St. Peter’s for voluntarily self-disclosing the misconduct after an internal investigation, and for cooperating with investigators to ascertain the extent of the false billing, including by providing documents, identifying individuals who were aware of relevant information and facilitating their participation in the investigation, and enhancing its corporate compliance program.

The signatories to the settlement agreement include the US Department of Justice; the Office of Inspector General of the Department of Health and Human Services, on behalf of the Medicare and Medicaid programs; the Defense Health Agency, on behalf of the TRICARE program; the Office of Personnel Management, which administers the Federal Employees Health Benefits Program; the US Department of Veterans Affairs; and the Office of Inspector General of the Railroad Retirement Board.

Read the press release here.

California Medical Director Sentenced to 37 Months in Prison for Medicare Fraud Scheme

Following a trial in the Central District of California, a medical director was sentenced to 37 months in prison for his role in a scheme that defrauded Medicare of $2.8 million for hospice services that patients did not need.

According to court documents, the defendant, John Thropay, M.D., was the medical director of several hospice companies in Van Nuys, California. The evidence presented at trial demonstrated that, from October 2014 to March 2016, Thropay fraudulently certified hospice patients with Medicare coverage as having terminal illnesses that they did not have, enabling the company could bill Medicare for its services. In 2015, Thropay was listed as the attending provider for more Medicare hospice claims than any other provider in the country. Thropay was found guilty of one count of conspiracy to commit health care fraud and four counts of health care fraud on February 15.

Read the press release here.

Pair Charged in COVID-19 Test Kickback Scheme

Earlier this month, Willie Ann Cleveland and Timothy C. Peoples were indicted in US District Court in St. Louis and pleaded not guilty to one count of conspiracy to receive and pay health care kickbacks.

The indictment alleges that, from 2017 through August 7, Peoples collected biological specimens for genetic and COVID-19 testing, primarily from Medicare patients at senior citizen centers in eastern Missouri. Cleveland and Peoples allegedly offered to pay a physician a $100 kickback in exchange for each lab test ordered. The indictment further alleges that the defendants created sham contracts to falsely characterize the kickbacks as a “monthly flat marketing fee.”

Cleveland allegedly received $9,000 from a laboratory on March 1, 2022, and wired $7,000 to Peoples three days later. If convicted, the defendants face up to five years in prison, a $250,000 fine, or both.

Read the press release here.