New Hampshire

February 4, 2010

Premier Medical Staffing, Inc. and Southern New Hampshire Medical Center Agree to Resolve Allegations Related to Their Employment of an Individual Who Was Excluded From Federal Health Care Programs (U.S. Attorney for the District of New Hampshire)

CONCORD, NEW HAMPSHIRE - United States Attorney John P. Kacavas and Susan J. Waddell, the Special Agent in Charge of the Office of Investigations, Office of Inspector  General,United States Department of Health and Human Services (“HHS”), announced on Feb. 4, 2010, that Premier Medical Staffing, Inc. (“Premier”) and Southern New Hampshire Medical Center (“SNHMC”) have agreed to pay civil settlements totaling $123,400.00 to resolve allegations related to the employment of an individual who previously had been excluded from participating in Federal health care programs. Premier is a New Hampshire corporation that is in the business of providing temporary staffing

services for health care providers. Between December 3, 2004, and June 1, 2006, Premier employed a licensed nursing assistant/certified nursing assistant who had been excluded from Federal health care programs. Premier placed this individual at a number of hospitals and other health care facilities where the individual performed services that were paid for by Medicare, Medicaid, and other Federal health care programs. Because the individual had been excluded from Federal health care programs, these hospitals and other health care facilities were not entitled to bill or receive payment for such services.

Without admitting any liability, Premier agreed to pay $90,000.00 to the United States to resolve allegations that it violated the False Claims Act by placing this excluded individual at these hospitals and health care facilities.

SNHMC is a not-for-profit acute care hospital located in Nashua, New Hampshire. Between February of 2002 and September of 2007, SNHMC contracted with various temporary staffing agencies to obtain the services of the same excluded individual referenced above. The individual performed services at SNHMC that were paid for, in part, by Medicare, Medicaid, and other Federal health care programs. Because the individual had been excluded from Federal health care programs, SNHMC was

not entitled to bill or receive payment from the Federal health care programs for these services. Without admitting any liability, SNHMC agreed to pay $33,400.00 to the United States to resolve allegations that it violated the False Claims Act by submitting claims to Federal health care programs for this individual’s services.

Under federal law, the Office of Inspector General of HHS can exclude individuals from participating in federal health care programs, including the Medicare, Medicaid, and TRICARE programs. Bases for exclusion are discussed on the Inspector General’s website: www.oig.hhs.gov.

Under federal law, no Medicare or other federal health program payments may be made with respect to items or services (even administrative and management services) that are furnished by an excluded individual. In many instances, the practical effect of such an exclusion is to preclude employment of an excluded individual in any capacity by a health care provider that receives reimbursement, indirectly or directly, from any federal health care program.

Submitting claims to federal programs such as Medicare or Medicaid for services provided by an excluded individual may give rise to liability under the civil False Claims Act. Under the False Claims Act, if it is established that a person has submitted false or fraudulent claims to the United States, the United States can recover treble damages and $5,500 to $11,000 for each false or fraudulent claim filed.

Both Premier and SNHMC cooperated in the government’s investigations. No patients were harmed or put in any jeopardy by the employment of the excluded individual.

In addition to entering into the Settlement Agreement, both entities have certified that they will follow certain policies and procedures to ensure that they do not employ such excluded individuals in the future.

This case was investigated by members of the Office of Investigations of the Office of Inspector General of the United States Department of Health and Human Services, with assistance from the Medicaid Fraud section within the New Hampshire Attorney General’s Office. The case was handled by Assistant United States Attorney John J. Farley.

December 7, 2009

Former New Hampshire Registered Nurse Pleads Guilty for Tampering with Dilaudid and Demerol Syringes at Southern New Hampshire Medical Center (U.S. Attorney for the District of New Hampshire)

CONCORD, NEW HAMPSHIRE: On Dec. 3, 2009 in U.S. District Court, Trinidad Smith, 28, of Manchester, NH, pleaded guilty to an indictment charging her with violations involving consumer product tampering and obtaining a controlled substance by fraud or deception.

During the plea hearing before Judge Joseph N. Laplante, Smith admitted to tampering with Demerol and Dilaudid syringes and vials that were maintained in a Pyxis machine for dispensing to patients at Southern New Hampshire Medical Center. Smith, who was a registered nurse licensed by the State of New Hampshire Board of Nursing, accessed the Pyxis machine containing the prescription pain medications by using her personal access number assigned to
her by the hospital. Smith admitted that after removing the drugs for her personal use, she replaced the medication in the syringes with saline and returned the tampered syringes to the machine for future use by patients.

As described at yesterday’s plea hearing, the investigation uncovered a total of 24 syringes and three vials that appeared to have been tampered with. Examination of the syringes revealed that their tamper resistant seals were cut or visibly broken with tape placed over the seals. The Forensic Chemistry Center of the Food and Drug Administration (FDA) found that the Dilaudid syringes were diluted by approximately 48% and 92%. Two of the syringes were also found to contain the active ingredient in Benadryl which certain patients are allergic.

Further testing of the Demerol syringes determined that Demerol’s active ingredient was diluted by approximately 46% to 85%.
Smith is scheduled to be sentenced on March 8, 2010, at 11:00 a.m. Smith’s plea
agreement, if accepted by the Court at the time of sentencing, will result in an incarceration term of 15 to 48 months.

The case was investigated by the FDA’s Office of Criminal Investigations and the Department of Health and Human Services Office of Inspector General. The case is being prosecuted by Special Assistant U.S. Attorney Shannon Singleton of the FDA’s Office of Chief Counsel and by Assistant U.S. Attorney Mark Irish.

For more information, visit the website of the United States Attorney's Office for the District of New Hampshire at: http://www.justice.gov/usao/nh/index.html

October 19, 2009

Four Pharmaceutical Companies Pay $124 Million for Submission of False Claims to Medicaid (U.S. Attorney for the District of New Hampshire)

CONCORD, NEW HAMPSHIRE: United States Attorney John P. Kacavas announced on Oct. 19, 2009 that four pharmaceutical companies have entered into settlement agreements for a total of $124 million to resolve claims that they violated the False Claims Act by failing to pay appropriate rebates to state Medicaid programs for drugs paid for by those programs.

Medicaid is a program that is operated by the federal government and the states to provide health insurance for low income individuals. Mylan Pharmaceuticals Inc. (“MPI”), UDL Laboratories Inc. (UDL), AstraZeneca Pharmaceuticals LP, and Ortho McNeil Pharmaceutical Inc. are participants in the Medicaid Rebate Program and executed Rebate Agreements with the United States. The Medicaid Prescription Drug Rebate Program was enacted by Congress in 1990 out of concern for the costs that Medicaid was paying for outpatient drugs.

By agreeing to participate in the Medicaid Rebate Program and signing these Rebate Agreements, the companies agreed to pay quarterly rebates to Medicaid that were based upon the amount of money that Medicaid paid for each company’s drugs. The precise amount of a rebate is determined in part by whether a drug is considered an “innovator” drug or a “non-innovator” drug. The rebate that must be paid for innovator drugs is higher than the rebate for non-innovator drugs.

Each of the companies agreed to pay a settlement to resolve allegations that it had sold innovator drugs that were manufactured by other companies and had classified those drugs as non-innovator drugs for Medicaid rebate purposes. As a result of the improper classification of these drugs, the companies underpaid their rebate obligations under the Medicaid Rebate Program.

MPI and UDL agreed to pay $118 million to resolve allegations that they underpaid their rebate obligations with respect to several MPI drugs (nifedipine extended release tablets, flecainide acetate, selegiline HCL, Orphenadrine Citrate Aspirin and Caffeine tablets, Triamterene/Hydrochlorothiazide, Propoxyphene HCL, Propoxyphene HCL/Aspirin/Caffeine, Prophyxphene Napsylate/Acetaminophen, Ibuprofen tablets, Bumetanide, Cephalexin, and Cefactor) and several UDL drugs (nifedipine extended release tablets, selegiline HCL, Triamterene & HCTZ, Propox Naps & APAP, Flecainide Acetate, Trihexyphenidyl, Ranitidine HCL syrup, Sucralfate Suspension, Selegiline HCL, and Bumetanide). Because the Medicaid program is funded by both federal and state governments, the federal government received $60,896,476.00, the states $49,824,389.00 of the settlement amount, and $7,279,135.00 will be paid to entities that participated in the Public Health Service’s Drug Pricing Program.

Separately, AstraZeneca paid $2.6 million to resolve allegations that it underpaid its rebate obligations with respect to Albuterol. Of that amount, $1,430,000.00 is to the federal government and $1,170,000.00 to the states.

Ortho McNeil paid $3.4 million to resolve allegations that it underpaid its rebate obligations with respect to Dermatop. Of that amount, $1,870,000.00 was paid to the federal government and $1,530,000.00 to the states.

This case was brought under the False Claims Act, which allows for private persons to file whistleblower suits to provide the government information about wrongdoing. If the government is successful in resolving or litigating its claims, the whistleblower who initiated the action may receive a share of the amount recovered. The whistleblower in this case was Ven-ACare, a corporation located in Key West, Florida. Ven-A-Care will receive a total of $10,787,392 for bringing this matter to the attention of the government.

Tony West, Assistant Attorney General for the Civil Division, said: “The Civil Division will continue to work to ensure that state Medicaid programs, which provide health care to more than 58 million Americans, benefit from the same discounts given to any large insurer. These cases are the result of the excellent cooperation between the Department of Justice and the states and demonstrate our commitment to protecting our most needy citizens.”

In announcing the settlements, United States Attorney John P. Kacavas said, “These settlements are the culmination of several years of hard work on the part of the government’s investigators and attorneys. The settlement with MPI and UDL is the largest health care fraud recovery that the U.S. Attorney’s Office in New Hampshire has ever obtained. These settlements show that the government is committed to identifying health care fraud and ensuring that companies that benefit from doing business with the government agree to play by the rules.”

This case was handled by the United States Attorney’s Office for the District of New Hampshire and the Commercial Litigation Branch of the Justice Department’s Civil Division with assistance from the Medicaid Fraud section within the New Hampshire Attorney General’s Office, as well as the National Association of Medicaid Fraud Control Units. The case was investigated by members of the Office of Investigations of the Office of Inspector General of the United States Department of Health and Human Services.

More information on the website for the United States Attorney's Office for the District of New Hampshire - http://www.justice.gov/usao/nh/

August 3, 2009

Former Nurse Pleads Guilty to Fraudulently Obtaining Oxycontin (U.S. Attorney for the District of New Hampshire)

CONCORD, N.H. – Dawn M. Kobylarz, of Hampton, N.H., pleaded guilty on July 30, 2009, to a criminal information charging her with two counts of fraudulently obtaining Oxycontin.  At a plea hearing before U.S. District Judge Paul Barbadoro, Kobylarz admitted that she obtained OxyContin and other drugs by fraud when she was employed at Haven Health of the Seacoast (“Haven”), a nursing home facility located in Hampton, New Hampshire.

Kobylarz admitted that in 2006 she forged orders for drugs, including OxyContin. When a pharmacy delivered the drugs to Haven, she would take the drugs, sign for them, and destroy the false documentation that she had prepared. She then would take the drugs home for her personal use and the use of her boyfriend.

Because many of the patients at Haven were having their health care costs paid by Medicare or by the Department of Veterans Affairs, the federal government was charged for these fraudulently-obtained drugs.

Judge Barbadoro has scheduled sentencing for October 16, 2009.

The case was investigated by Special Agents of the Concord, New Hampshire office of the Department of Health and Human Services Office of Inspector General (HHS-OIG), the Office of Inspector General of the Department of Veterans Affairs, the Office of Criminal Investigations of the Food and Drug Administration, the Drug Enforcement Administration, and the Medicaid Fraud section within the New Hampshire Attorney General’s Office

The case is being prosecuted by Assistant U.S. Attorney John J. Farley.

More information on the U.S. Attorney for the District of New Hampshire:
http://www.usdoj.gov/usao/nh/index.html

July 23, 2009

Third Massachusetts Resident Sentenced In Nationwide Internet Prescription Drug Ring Concord, New Hampshire (U.S. Attorney for the District of New Hampshire)

Phatsany Lae Syharath, age 28, of Lynn, Mass., was sentenced today for her role in an internet prescription drug ring. During a hearing before U.S. District Court Judge Paul J. Barbadoro, Syharath was sentenced to two years of probation and six months of home confinement. Syharath had previously pleaded guilty to Count One of a two count Indictment charging her with Conspiracy to Smuggle and Illegally Distribute Anabolic Steroids, HGH, IGF-1 and Clenbuterol.

The indictment charged Syharath and two co-defendants, Christopher Chase and Kenton Benloss, with illegally importing the aforementioned prescription drugs and introducing the prescription drugs into interstate commerce without the prescription of a licensed doctor. The investigation revealed that the prescription drugs were acquired from China, Moldova and seven other foreign countries.

Many of the packages containing the prescription drugs, which were smuggled into the United States, falsely declared that the packages contained test tube samples, mold samples, glass samples, measuring cups and glassware. The prescription drugs did not bear adequate directions for use in that the labeling did not contain directions under which a layperson could use the drugs safely and for their intended uses.

Syharath’s role in the scheme was to receive the packages containing the illegal prescription drugs and deliver them to Chase. Pursuant to Chase’s instructions, Syharath made multiple structured wire transfers of less than $3,000 to pay for the drugs. Syharath structured payments in amounts less than $3,000 to avoid detection of the scheme.

This case was investigated by the Office of Criminal Investigations of the Food and Drug Administration, U.S. Immigration and Customs Enforcement, and the U.S. Postal Inspection Service. The case was prosecuted by Special Assistant U.S. Attorney Sarah Hawkins and Assistant U.S. Attorney Mark Irish.