The Project On Government Oversight is a non-partisan, non-profit organization that, for over sixteen years, has investigated and exposed waste and fraud in government spending.
Our methods include networking with government investigators and auditors whose findings have received little attention, working with whistleblowers inside the system who risk retaliation for exposing waste and fraud themselves, and performing independent investigations into areas we suspect are problematic.
This survey is, by necessity, only a partial listing of settlements and judgements. Many False Claims Act settlements are not made public, and there is no comprehensive database that compiles information on those that are made public. The Project On Government Oversight has made every attempt to avoid duplicate case listings. The qui tam provision of the False Claims Act allows a person with knowledge of fraud to file a case on behalf of the government. Such cases are noted in the description of the settlements in this survey.
Due to the amount of fraudulent activity, the Project On Government Oversight has limited the time frame of this survey to those cases resolved from 1994 through 1996. Activities over this two-year period account for nearly $2 billion worth of government recoveries -- recoveries that would not have been collected without the False Claims Act and its qui tam provision.
The major trade associations for the defense and health care industries have risen up in support of the Hughes Aircraft Company -- the defendant in a pending fraud case before the Supreme Court. Hughes' appeal to the Supreme Court challenges the potency of the False Claims Act. This law, which was inspired by Civil War profiteering, has successfully forced those who defraud the government to pay for their illegal activities. It is for this reason that the defense and health care industries, which account for the overwhelming majority of False Claims Act settlements, are attacking this law.
In 1994, the Project On Government Oversight issued a report that found of the 22 defense contractors who were lobbying the Senate to water down the False Claims Act, 90% had been involved in fraud and abuse in government contracting practices themselves. At the time, those companies had paid over $500 million in penalties and settlements to the government for their fraudulent activities.
Now, having been unsuccessful in Congress, they have moved their battle to the courts. Along the way they picked up a powerful ally in the health care industry.
Currently, we see both the defense and the health care industries jumping at the opportunity to weaken this effective law. The Aerospace Industries Association, the Shipbuilders Council of America, the National Security Industrial Association and the Electronic Industries Association have been joined by the American Medical Association, the American Hospital Association and the American Association of Medical Colleges in their attacks on the False Claims Act. These associations are arguing in amicus curiae briefs to the Supreme Court, that this law is being used to unfairly prosecute their members over "regulatory disputes."
The fact is, however, that just since 1994, the health care industry has repaid the government over $1 billion1, and the defense industry over $850 million, due to the False Claims Act. As the following survey makes clear, there is no question that the vast majority of False Claims Act settlements were made in the face of evidence of fraudulent activity.
It is not surprising that the defense and health care industries would rather the government and its qui tam partners did not have use of this tool to pursue fraudulent activity in government contracting. It is far too effective for their taste.
Funds Returned to the United States Treasury By Defense Contractors Under the False Claims Act (2) During the Years 1994 - 1997
American Eurocopter Corporation
$10 million to settle a qui tam suit in connection with the sale of five search and rescue helicopters to Israel. QTQR April 1997
Air Industries Corporation
$6.8 million to settle a qui tam suit alleging that the company delivered improperly tested aircraft fasteners to the Department of Defense and civilian aircraft manufacturers. False Claims Act & Qui Tam Quarterly Review3 July 1996
AGS Food Incorporated
$1.26 million to settle a qui tam suit alleging that the company falsified food costs, retained duplicate payments, misrepresented their intentions to pay the government and engaged in price fixing and kickbacks. The company sold commissaries on military bases in California. Defense Contract Litigation Reporter4 March 24, 1994
Alliant TechSystems Incorporated and Accudyne Corporation
$12 million to settle a qui tam suit alleging that Accudyne failed to properly test electronic assemblies supplied under an Army contract. Federal Contract Report5 July 3, 1995
$13.9 million to settle allegations that the company did not provide accurate and complete pricing information on air traffic control equipment. FCR December 26, 1994
$4 million to settle a qui tam suit alleging that the company inflated contracts for designing government facilities to cover the cost of its employee pension plan. Department Of Justice6 press release August 26, 1996
Battelle Memorial Institute
$330,000 to settle a qui tam suit alleging that the company used government owned equipment to service commercial customers. FCR June 10, 1996
BDM Federal Incorporated
$375,000 to settle allegations that the company improperly transferred funds from an Air Force contract. Richmond Times-Dispatch March 4, 1996
BEI Sensors and Systems
$1 million to settle a qui tam suit alleging that the company failed to properly test devices used to measure the gravitational pull on Air Force planes and pilots. DOJ press release December 6, 1995
B.F. Goodrich Company
$552,500 to settle allegations that the company manufactured defective rafts for the Army. QTQR October 1995
$75 million to settle allegations that the company overcharged and mischarged military contracts. DCLR May 12, 1994
Computer Tape Source Incorporated
$146,000 to settle allegations that the company presented old computer tapes as new. Department Of Defense Inspector General Semi-Annual Report to Congress7 October 1, 1993 - March 31, 1994
1. $19.5 million to partially settle allegations that the company overcharged parts sold to the Army, the Air Force and the Navy. FCR October 2 1995
2. $10.2 million to settle the remaining portion of the above settlement. This allegation pertained to the Beaver Precision Products division overcharging missile and aircraft parts. DOJ press release May 31, 1996
Deloitte & Touche, LLP
$396,000 to settle a qui tam suit alleging that the company submitted false claims in connection with consulting contracts with the Bonnerville Power Administration and the DOJ. QTQR April 1996
Dillingham Construction Pacific Ltd. et al.
$1 million to settle allegations of improperly tested pipe welding at a chemical weapons disposal plant in the Pacific Ocean. QTQR April 1997
Dynamics Research Corporation
$1.79 million to settle a civil suit alleging that the company knowingly submitted false claims on a contract to provide a centralized data system for the F-16 aircraft. DCLR May 26, 1994
$250,000 to settle a qui tam suit alleging that the company did not perform maintenance and other services at Fort Belvoir. DOD IG SAR October 1, 1994-March 31, 1995
Equipment And Supply Incorporated
$1.4 million to settle a qui tam suit alleging that the company's parts and services equipment did not meet contract specifications. DOJ press release December 15, 1994
$4.75 million to settle a qui tam suit alleging that the petroleum additives it sold companies for use in military vehicles did not meet military specifications or pass required testing. DOJ press release April 10, 1996
$8.2 million to settle a qui tam suit alleging that the company submitted false statements to the Air Force. DOD IG SAR October 1, 1994-March 31, 1995
$13 million to settle a qui tam suit alleging that the company inflated independent research and development and bid and proposal costs for the Bradley Fighting Vehicle and the M113 tank. DOJ press release October 8, 1996
General Dynamics Corporation
$1.8 million to settle a qui tam suit alleging that the company over billed F-16 testing. QTQR April 1995
General Electric Company
1. $7.1 million to settle a qui tam suit alleging that the company failed to satisfy electrical bonding requirements for its jet engine contracts, thereby creating a safety risk. FCR August 14,1995
2. $5.87 million paid by GE and Martin Marietta, to settle a qui tam suit associated with improper sales of radar systems to Egypt. DCLR January 26, 1995
3. $950,000 to settle a qui tam suit alleging that GE misrepresented that it had conducted certain test procedures on circuit boards that had not undergone the required procedures. DOJ press release January 10, 1997
Grimco Pneumatic Corp.
$704,000 to settle a suit alleging that the company provided defective arresting cable equipment to the Navy. QTQR January 1998
$2.2 million to settle allegations that a former Grumman Data Systems vice-president knowingly overstated the cost of installing a supercomputer for NASA. This settlement was in addition to a previous partial settlement of $1.1 million. FCR July 11, 1994
1. $3.25 million to settle allegations that the company improperly increased overhead rates. DCLR March 10 1994
2. $3.2 million paid by GTE Government Systems Corporation and Canadian Marconi Corporation, to settle a qui tam suit alleging that the company did not inform the Army concerning radios that did not meet requirements. FCR July 17, 1995
1. $1.6 million to settle allegations that it improperly obtained confidential information to win a contract with the Federal Emergency Management Agency. DOJ press release June 21, 1995
2. $1.5 million to settle allegations that it overestimated labor costs in a Navy contract. FCR May 8, 1995
Holmes and Narver Services, Incorporated
$690,000 to settle a qui tam suit alleging false claims on an Army contract for painting services at Aberdeen Proving Ground, Maryland. QTQR July, 1998
Hughes Aircraft Company, Incorporated
1. $4.05 million to settle a qui tam suit alleging that the company failed to perform tests on electronic equipment for the military. DOJ press release September 10, 1996
2. $500,000 to settle two qui tam suits alleging the failure to properly test component of MK- 48 torpedoes. DOJ press release June 12, 1997
$1.3 million paid by the company and CEO Fernando Niebla to settle allegations that the company made false statements to receive an Air Force contract. Boston Herald July 30, 1996
Israel Aircraft Industries Ltd.
$8.5 million (plus interest) to settle allegations that the company knowingly submitted false cost data in negotiating several Navy contracts. FCR July 24, 1995
$250,000 to settle allegations that the company made unauthorized design changes on switches for the Defense Department. DCLR May 12, 1994
$475,000 to settle a qui tam suit alleging inflated claims of classroom contact time in a program of weekend courses at Warren Air Force Base in Cheyenne, Wyoming. QTQR April, 1997
$82 million to settle a qui tam suit alleging commercial data processing costs were passed on to the government. FCR July 18, 1994
1. $6.3 million to settle allegations that the company withheld cost information that inflated the contract price. FCR December 26, 1994
2. $500,000 to settle allegations that Randtron Systems Incorporated, a unit of Lockheed, did not give the government relevant information that would have lowered the price of military contracts for radar antennas. DOJ press release October 18, 1996
Lockheed Martin Incorporated
1. $5.3 million to settle allegations that the company deliberately bid low to win a contract then made up the shortfall by boosting research and development costs. DOJ press release December 23, 1996
2. $200,000 to settle a qui tam suit alleging that its Federal Systems division failed to inspect and test computer components used on military aircraft. QTQR October, 19988
$88 million to settle a qui tam suit alleging defective parts and falsification of data for the Navy's F/A-18. FCR October 9, 1995
See second listing under GE.
McDonnell Douglas Corporation
$2 million to settle a qui tam suit alleging that it overcharged DOD to repair equipment used to manufacture C-17 aircraft. DOJ press release November 19, 1997
Monroe Wire and Cable Corporation
$532,000 to settle allegations that the company's cable did not meet specifications. DOD IG SAR October 1, 1993-March 31, 1994
$400,000 to settle a qui tam suit alleging that the Myers Systems unit misrepresented its size in order to win 23 small business set-aside contracts with DOD. QTQR January 1998
$7.8 million to settle allegations of mischarging and defective pricing, as well as misrepresentations in their submission to the DOD Voluntary Disclosure Program. DOJ press release September 15, 1994
$3.2 million to settle a qui tam suit alleging the company overcharged on labor costs for environmental surveys and similar services at Brooks Air Force Base, TX. FCR October 16, 1995
Philips Electronics North America Corporation
$65.3 million settlement for selling improperly tested capacitors and resistors for a number of military and aerospace programs. This amount includes the $9.6 million submitted by Philips in 1992 through the DOD Voluntary Disclosure Program. DOJ press release February 26, 1996
Pizzagalli Construction Company, Inc. et al.
$950,000 to settle a qui tam suit alleging that Pizzagalli defrauded the Army Corps of Engineers during the construction of the Faith Barracks Project at Fort Bragg, North Carolina. QTQR January 1998
Pneumo Abex Corporation
$12.5 million to settle allegations that the company mischarged labor costs. DOJ press release January 2, 1996
$72,500 to settle a qui tam suit alleging that the company falsely billed the Commerce Department for equipment that was not delivered. FCR May 23, 1994
$4.7 million to settle allegations that it falsely stated it could manufacture night vision military equipment and passed off another company's equipment as its own. DOJ press release June 1, 1995
Rockwell International Corporation
$27 million to settle allegations that the company did not provide accurate, complete, and current information involving the B1-Bomber. FCR August 7, 1995
$4 million to settle allegations the company inflated missile detection site contract prices. FCR November 11, 1994
Science Applications International Corporation
1. $2.5 million to settle a qui tam suit alleging that Science Applications International Technology failed to perform its contract and misled the Air Force about its work. FCR December 25, 1995
2. $230,000 paid by Science Applications International Corporation, AlliedSignal Technical Services Corporation and Lloyd Electric Company to settle allegations that they improperly tested electric cables. DOJ press release May 10, 1995
SL Industries and SL Auburn Incorporated
$600,000 to settle a qui tam suit alleging that the companies produced defective and substandard aircraft and tank engine igniters. FCR December 4, 1995
$200,000 to settle a qui tam suit alleging that the company falsely represented its capability to test space station components. FCR June 5, 1995
$891,000 to settle allegations that the company over billed the Department of Defense for tools used by military installations. DOJ press release December 12, 1996
$7.2 million to settle qui tam allegations that it manufactured faulty transmission parts for Army helicopters. DOJ press release March 7, 1997
Support Systems Associates, Incorporated
$400,000 to settle allegations of cost mischarging including cross-charging labor hours and billing for services not provided. DOD IG SAR April 1, 1994-September 3, 1994
Systems Engineering and Management Associates Incorporated
$765,000 to settle a qui tam suit alleging that the company overcharged for labor and overhead. FCR August 15, 1994
Teledyne Industries Incorporated
1. $85 million to settle a qui tam suit alleging the Teledyne Relays division falsely certified relay switches sold to the U.S. military. DCLR April 28, 1994
2. $27.5 million to settle a qui tam suit alleging Teledyne Systems arbitrarily inflated cost data and represented it as current, accurate, and complete. DCLR April 28, 1994
3. $13.95 million to settle a qui tam suit alleging that a recently acquired subsidiary of Teledyne routinely billed the Government for work done for commercial customers, resulting in inflated prices for military systems. QTQR January 1998
4. $6.75 million to settle allegations that Teledyne Thermatics improperly tested aerospace wire and cable and did not meet testing requirements. DOJ press release December 23, 1996
5. $5.65 million to settle a qui tam suit alleging the company charged the government for nonproductive time and did not properly test "identification friend or foe" systems for military aircraft. FCR October 24, 1994
6. $4.75 million to settle a qui tam suit alleging that the company could not account for military aircraft parts, many of which simply disappeared. DOJ press release December 23, 1996
7. $2 million to settle a qui tam suit alleging that the company improperly tested and failed to calibrate test equipment in manufacturing "identification friend or foe" components for the Air Force. FCR November 13, 1995
8. $850,000 to settle a qui tam suit alleging defective pricing when the company charged the government for less costly equipment that the company already had in stock. DOJ press release November 10, 1994
9. $500,000 to settle allegations that Teledyne Electronics substituted parts and failed to perform required tests in connection with radar test sets supplied to the Army. DOJ press release December 6, 1994
Texas Instruments Incorporated
$5 million to settle allegations that its Defense Systems Electronics Group overcharged the government on contracts for guided missiles sold to the Navy. This settlement is in addition to a previous payment of $230,750 paid under the DOD Voluntary Disclosure Program. Settlement Agreement August 5, 1994
$29 million to settle allegations of mischarging labor costs on military subcontracts. DCLR May 12, 1994
$150 million to settle a qui tam suit alleging that its Sikorsky Aircraft Division prematurely billed work not yet performed on a helicopter contract with the U.S. military. This settlement followed an allegedly inadequate DOD voluntary disclosure. DCR April 14, 1994
University of California/Lawrence Livermore National Laboratory
$2.7 million to settle allegations that they mismanaged federal research and development funds. DOJ press release October 17, 1996
Varo Incorporated (Imo Industries Incorporated)
$2 million to settle a qui tam suit alleging that Varo, its Ni-Tec division and Optic Electronic Corporation delivered night vision equipment components for the Army that did not meet reliability and testing requirements. DOJ press release July 18, 1996.
$139,586 to settle allegations it mischarged labor hours among several Navy contracts. DOJ press release March 19, 1997
Westinghouse Electric Corporation
$1.88 million to settle allegations that the company did not tell the Air Force about other sales of spare parts that should have lowered the unit cost. This amount includes the $258,030 paid to the Air Force under the DOD Voluntary Disclosure Program. DOJ press release December 12, 1994
Funds Returned to the United States Treasury By the Health Care Industry Under the False Claims Act During the Years 1994 - 1997
I. Hospitals and Other Health Care Providers
Alton Ochsner Medical Foundation
$1.7 million to settle a suit involving double billing to Medicare under the "72 hour window" investigation. QTQR January 1998
Baptist Medical Center -- Kansas City
$17.5 million to settle False Claims Act allegations that it paid more than $1 million in kickbacks to a local medical group in return for the group's referral of Medicare-eligible patients. QTQR October 1997
$141 million civil settlement and $20 million criminal settlement for alleged kickbacks and fraud in its home infusion, oncology, hemophilia and human growth hormone businesses. Payments were allegedly made to doctors to refer patients to the company. U.S. Attorney, Southern District of Ohio press release April 22, 1996
Charter Westbrook Behavioral Health Systems Incorporated - Virginia
$2 million to settle a qui tam suit alleging improper compensation to physicians for referrals. DOD IG SAR October 1, 1994-March 31, 1995
CHR Claridge House - Florida
$415,000 for allegedly improperly billing the government for medical supplies in treatment of CHR residents using a third party billing agent, Handle With Care. Settlement Agreement March 27, 1995
Clinical Practices of the University of Pennsylvania
$30 million settlement for alleged inadequate documentation and false Medicare billings by attending physicians for services performed by residents in training. QTQR January 1996
Community Psychiatric Centers of Oklahoma, Inc.
$750,000 to settle a qui tam suit against allegations that a hospital subsidiary, CPC Southwind, treated children in an unsafe and harmful environment and then billed Medicaid for services. DOJ press release February 11, 1997
Crozer-Chester Medical Center
$664,504 to settle FCA allegations involving the misuse of a pneumonia diagnosis code in its Medicare claims. QTQR January 1998
Emergency Physicians Billing Services et al.
1. $7.75 million to settle a qui tam suit alleging that it overcharged Medicare, Medicaid, CHAMPUS, and the Federal Employees Health Benefits Program in connection with claims submitted by its billing company. DOJ press release May 21, 1997
2. $268,460 to settle a qui tam suit alleging that Medicus Medical Group received over-payments based on false claims submitted by Medicus' billing company. DOJ press release June 5, 1997
First American Health Care of Georgia
$20 million of a $255 million settlement for over billed and fraudulent Medicare claims by the home health care company. DOJ press release October 18, 1996
Florida Club Care Center
$245,488 for allegedly submitting claims for supplies used by residents that had not been used, also using Handle With Care as the billing agent. DOJ press release June 23, 1995
GMS Management-Tucker, Incorporated et al.
$600,000 settlement for allegedly not providing adequate nutritional or wound care needs to their nursing home residents, yet billing Medicaid and Medicare for these services. QTQR July 1996
Health Care Capital, Central Park Lodges, Health Resources Northwest
$2.2 million to settle allegations that these three nursing home management companies and nursing facilities submitted false Medicare bills for supplies. DOJ press release December 1, 1995
Horizon/CMS Healthcare Corporation
1. $5.78 million to settle allegations that the nursing home chain inflated Medicare and Medicaid bills for certain medical supplies that it had used. U.S. Attorney, District of New Mexico press release December 31, 1996.
2. $4.6 million to settle a suit alleging that the company improperly billed Medicare and Medicaid. QTQR April 1997
Lopez et al.
$2 million for improper claims involving kickbacks to physicians and clinic owners in exchange for patient referrals by two clinics Lopez operated. QTQR January 1998
Metzinger et al.
$60,000 to settle allegations that two Medicare billing consultants defrauded Medicare in connection with clinical laboratory outpatient services. QTQR October 1997
Mt. Sinai Medical Center of Cleveland
$472,000 for allegedly resubmitting Medicare claims for blood work under new codes after having been denied reimbursement for them. DOJ Health Care Fraud Report9 FY94.
National Medical Enterprises
$324 million civil settlement and $53 million in criminal fines and penalties for allegedly paying kickbacks for patient referrals and providing unnecessary treatment at psychiatric hospitals in 30 states. Settlement Agreement June 29, 1994
Northwestern Institute of Psychiatry (Matrix Health Management)
$1.4 million for allegedly referring railroad employees for unnecessary drug and alcohol treatment and paying kickbacks to a firm that recruited patients. DOJ HCFR FY94
Ohio Hospital Project
$6.6 million settlement by 17 Ohio hospitals for allegedly billing Medicare and Medicaid for individual blood tests even though they were performed in "bundles" on automated machines. Cleveland Plain Dealer December 4, 1996
$12.65 million to settle a qui tam suit alleging that several of its hospitals defrauded Medicare through illegal contracts and kickbacks. QTQR October 1997
Park Medical Center - Ohio
$1.45 million settlement for allegedly billing Medicare and Medicaid for geriatric psychiatric services that were not reasonable or necessary. QTQR October 1996
Pineville Community Hospital Association, Incorporated et al. - Kentucky
$2.5 million to settle a qui tam suit alleging fraudulent billing by a hospital association and two doctors, over a ten year period, for work not performed. QTQR July 1995
Respro - Kentucky
$90,000 for allegedly participating in a scheme to increase the volume of Medicare claims so it could boost reimbursements to itself. DOJ press release September 29, 1994
72 Hour Rule Investigation
$3.4 million settlement paid by 83 Massachusetts hospitals for alleged duplicate billing to Medicare. Massachusetts General Hospital paid the highest fine --$400,000. This settlement is part of an ongoing nationwide government probe into Medicare outpatient billing practices. DOJ press release May 22, 1996
St. Luke's Hospital - Massachusetts
$1.3 million to settle allegations of Medicare double billing for radiology tests performed on inpatients. QTQR July 1997
Sterling Medical Associates - Ohio
$700,000 to settle a qui tam suit alleging Sterling, a provider of civilian physicians to military hospitals, misrepresented the size of the company to obtain federal small business contracts. Government Contract Litigation Reporter January 4, 1996
Sutter Memorial Hospital - California
$1.26 million to settle a qui tam suit alleging improper billing for cardiac device implant procedures not covered by Medicare. Part of ongoing qui tam suit against 130 hospitals for overcharging Medicare for medical devices. DOJ press release February 14, 1996
$500,000 from national provider of outpatient and home infusion therapy for allegedly offering stock options to physicians in exchange for referrals. DOJ press release September 26, 1994
U.S. HomeCare Corporation
$650,000 to settle a qui tam suit alleging submission of false Medicare claims, and inadequate documentation including forged nurses signatures and "canned" nursing notes in their Miami operations. QTQR July 1995
Vendell Healthcare, Inc.
1. $654,000 to settle a suit alleging Medicare overcharges. QTQR October 1997
2. $4.2 million to settle a suit alleging the overcharging of several federal health insurance programs. QTQR January 1998
II. Medical Equipment and Drugs
Advanced Care Associates, Incorporated et al.
$4.03 million to settle a qui tam suit for allegedly falsifying documents on the medical condition of Medicare beneficiaries to obtain reimbursement for lymph edema pumps, which are used to reduce swelling of the limbs. DOJ press release June 19, 1996
Apria Healthcare Group, Inc. et al.
$2 million to be paid by Apria Healthcare Group, a home health care provider of pulmonary equipment, Georgia Lung Associates (GLA), a group of four physicians, Paso del Norte Health Foundation of El Paso, Texas and Physicians Pharmacy Inc. of Georgia in order to settle a qui tam suit alleging that they defrauded Medicare through improper kickbacks and patient referrals. QTQR April 1997
Becton Dickinson & Company
$3.3 million to settle a qui tam suit for allegedly overcharging the Department of Veterans Affairs for medical equipment for microbiological tests. DOJ press release June 19, 1995
Circa Pharmaceutical Incorporated
$2.7 million settlement for allegedly selling untested generic drugs to Medicare, Medicaid, and the Department of Veterans Affairs. DOJ press release March 28, 1996
Curative Industries Incorporated, UltraMed Incorporated
$2.1 million to settle a qui tam suit for allegedly submitting Medicare claims for lymph edema pumps that did not meet engineering requirements. DOJ HCFR FY94
1. $4.9 million to settle a qui tam suit alleging false representations to dealers and suppliers that it qualified for Medicare's highest reimbursement rate for their lymph edema pump, causing the dealers and suppliers to submit false claims for reimbursement. Settlement Agreement July 24, 1995
2. $1.35 million to settle a qui tam suit alleging that the Texas medical equipment dealer submitted false Medicare claims for lymph edema pumps and sleeves. DOJ press release May 23, 1997
$6.4 million to settle a qui tam suit for alleged submission of thousands of false invoices for health care products, equipment and supplies to the Department of Veterans Affairs. Medline failed to disclose that certain of its items were manufactured in non-designated countries. QTQR July 1996
Modern Wholesale Drug Midwest, Incorporated (Rugby Laboratories)
$7.5 million to settle a qui tam suit for allegedly overcharging Department of Veterans Affairs for generic drugs. DOJ press release October 31, 1995
National Medical Systems
$1.5 million to settle a qui tam suit for alleged billing of Medicare for top-of-the-line lymph edema pumps when it actually provided much cheaper equipment. Settlement Agreement September 29, 1995
Orem Medical Corp. et al.
$3 million to settle a suit alleging false billings under a Department of Veterans Affairs medical supplies contract. QTQR July 1997
Shiley Incorporated, Pfizer Incorporated
$10.75 million settlement for alleged false claims on potentially fatal artificial heart valves. FDA approval of the valves was based on false statements. DOJ HCFR FY94
Summit Healthcare Systems, Incorporated and Global Medical Systems, Incorporated
$500,000 for allegedly over billing Medicare by as much as 700% for durable medical equipment. DOJ press release June 11, 1996
Superior Surgical Manufacturing Company, Incorporated
$6.5 million settlement for allegedly overcharging the Department of Veterans Affairs, the General Services Administration and other agencies for medical and clothing items. Superior pled guilty to a one-count felony information. QTQR July 1996
United States Surgical Corporation
$10 million settlement for alleged failure to disclose accurate and complete pricing information to government negotiators for surgical instruments. DOJ press release December 7, 1995
III. Medical Laboratories
Allied Clinical Laboratories, Incorporated
$4.9 million to settle a qui tam suit for alleged false claims for Medicare reimbursement of laboratory tests to Medicare. DOJ press release March 20, 1995
Corning Clinical Laboratories Incorporated
1. Damon Clinical Laboratories, Incorporated
$84 million to settle a qui tam suit and $35 million criminal fine for allegedly manipulating doctors to order blood tests that were not medically necessary and improperly billing the tests to Medicare. Damon is currently owned by Corning Clinical Laboratories. DOJ press release October 9, 1996
2. Metpath Incorporated
$8.6 million to settle a qui tam suit for allegedly submitting claims to Medicare and Medicaid for lab tests not performed. Metpath is owned by Corning Clinical Laboratories. QTQR July 1995
3. Metpath Incorporated
$7 million to settle a qui tam suit (along with $4 million by Unilab Corp.) for allegedly billing for certain blood tests that were not ordered or medically necessary. QTQR October 1996
$6.67 million settlement for allegedly manipulating doctors into requesting medically unnecessary tests whenever doctors ordered simple blood tests. These were then improperly billed to Medicare. Bioran is owned by Corning Clinical Laboratories. Settlement Agreement February 1996
Franklin Laboratories, Inc. et al.
$4.9 million to settle a suit alleging that the lab defrauded Medicare by submitting claims for blood and urine tests that were not medically necessary or were never performed. QTQR July 1997
Laboratory Corporation of America
1. $182 million qui tam settlement, plus a criminal fine of $5 million, for allegedly billing Medicare for lab tests that were not performed, or that had not been requested by physicians. DOJ press release November 21, 1996
2. $700,000 to settle a qui tam suit alleging Medicare overcharges of car mileage reimbursement for phlebotomists driving their personal vehicles to the residences of homebound or nursing home patients to draw blood samples. QTQR July 1997
Meris Laboratories, Inc. et al.
$5.2 million to settle a qui tam suit for allegedly defrauding Medicare and Medi-Cal, the California Medicaid program, by improperly billing for various lab tests. QTQR April 1997
Physicians Clinical Laboratory et al.
$2 million for the alleged overbilling of Medicare, Medi-Cal, and CHAMPUS, for lab tests. QTQR January 1998
SmithKline Beecham Clinical Laboratories, Inc.
$325 million to settle three qui tam suits alleging that the company defrauded Medicare,Medicaid, CHAMPUS, the Railroad Retirement Board, and the Federal Employees Health Benefits Program. QTQR April 1997
$10.1 million to settle a qui tam suit alleging that the company improperly billed Medicare and other government health insurance programs for laboratory tests on patients suffering from kidney failure. DOJ press release December 20, 1996
$4 million to settle a qui tam suit (along with $7 million by Metpath Incorporated) for allegedly billing for certain blood tests that were not ordered or medically necessary. QTQR October 1996
IV. Research Colleges and Institutes
The Board of Trustees of the University of Alabama et al.
$1.66 million judgement in qui tam case for false representations on grant proposals and progress reports to NIH. QTQR July 1995
Henry M. Jackson Foundation for the Advancement of Military Medicine
$45,920 to settle a qui tam suit for alleged mischarging labor, training and research costs not covered in NIH contract for radiology services. QTQR July 1995
Thomas Jefferson University and the Jefferson Faculty Foundation - Pennsylvania
$12 million settlement for alleged inadequate documentation and billings by attending physicians when residents actually performed the services. QTQR October 1996
New York University Medical Center
$15.5 million to settle a qui tam suit alleging that it submitted false information in connection with indirect costs associated with federally sponsored research grants and contracts. QTQR July 1997
University of Chicago
$250,000 to settle a suit alleging misappropriations of federal grant funds for cancer research. QTQR January 1998
University of Connecticut Health Center
$1.3 million to settle a qui tam suit alleging fraud surrounding a grant program at its Medical and Dental Schools. QTQR January 1998
University of Utah, University of California and Dr. Ninneman
$1.6 million to settle a qui tam suit alleging the two Universities ($950,000 paid by University of Utah and $625,000 paid by University of California) knowingly allowed Dr. Ninneman to falsely report research results to NIH. DOJ HCFR FY94
University of Virginia Health Services Foundation
$8.6 million to settle a suit alleging improper billing of Medicare for services provided by residents and interns of the Medical School Faculty. QTQR January 1998
V. Ambulance Services
American Ambulance and Oxygen Service
$1.475 million to settle a suit alleging that the company defrauded Medicare and Medicaid by submitting claims for ambulance transport for physician office visits, a service whose reimbursement is generally prohibited. QTQR July 1997
Crescent City EMS, Inc - Louisiana
$1.86 million to settle a qui tam suit alleging billing for ambulance service for Medicare dialysis, patients who they claimed as being confined to bed, although they could actually walk. DOJ HCFR FY94
Fire Protection District No. 5, Mason County et al. - Washington State
$160,000 to settle a qui tam suit alleging fraudulent billing for ambulance services. QTQR July 1996
Health Careers, Incorporated et al.
$12 million settlement for allegedly billing for ambulance services for Medicare beneficiaries when they were in fact transported in passenger vans, as well as billing for patients whose medical condition did not require transportation by ambulance. Settlement Agreement April 25,1996
Professional Ambulance Service Incorporated, L&M Ambulance Corporation and Trinity Ambulance Corporation of Connecticut
$700,000 settlement by three ambulance companies for allegedly billing Medicare for unnecessary services. DOJ press release December 18, 1996
VI. Insurance Providers
Blue Cross/Blue Shield of Florida
$10 million to settle a qui tam suit alleging mishandling of claims and knowingly choosing a data processing firm that could not handle the claims volume. DOJ HCFR FY94
Blue Cross/Blue Shield of Massachusetts
$2.75 million to settle a qui tam suit for allegedly submitting false Medicare reports. DOJ HCFR FY94
Blue Cross/Blue Shield of Michigan
1. $27.6 million to settle a qui tam suit alleging improper billing and submitting false documentation to Medicare, and inadequate audits of hospital cost reports. DOJ press release January 18, 1995
2. $24 million settlement for unlawfully billing Medicare for thousands of claims that should have been paid from private insurance funds. DOJ press release January 18, 1995
Blue Shield of California
$12 million to settle a qui tam suit alleging that it submitted false claims under its contract with HCFA to process and pay Medicare claims. DOJ press release May 2, 1997
Provident Accident Life and Accident Insurance Co.
$27 million to settle a qui tam suit for alleged false Medicare billing. National Health Lawyers News Report May 1996.
Dr. Anthony et al. - Ohio
$1.52 million qui tam settlement by nine physicians and their medical imaging corporations for alleged improper Medicare and Medicaid referrals to diagnostic firms in which the doctors had a financial interest. QTQR July 1995
Dr. Marlou Davis - Missouri
$4.1 million judgement for soliciting elderly patients from nursing homes, supermarkets, malls and drug stores and promising them early detections of illnesses including heart disease and strokes. He then charged Medicare for the tests. BNA Medicare Report October 25, 1996
Dr. Jaramillo, Medical Institute for Mental Health, and Memorial Hospital - New Mexico
$700,000 to settle a qui tam suit alleging billing Medicare, Medicaid and CHAMPUS for psychiatric services that were not provided or were provided by a non-physician assistant without appropriate supervision. QTQR July 1996
Dr. Kurwa et al.
$375,000 to settle a suit alleging fraudulent Medicare billing. QTQR January 1998
Dr. Merendino et al. - Washington, DC
$3.1 million to settle a suit alleging improper Medicare claims for physical therapy services rendered at seven nursing homes in Maryland, the District of Columbia, and Virginia. QTQR July 1997
Dr. Nalls - Miami
$4.29 million judgement for Medicare fraud against Nalls, who also has been permanently enjoined from the Medicare program, from dissipating his assets, and from disposing of any of his business records. QTQR July 1997
Dr. Schwartz, Dr. Barr & Dr. Silver et al. - Washington, DC
$278,800 to settle a qui tam suit against group of doctors for allegedly billing for chemotherapy treatment even though the treatment was provided by nurses, and no doctors were present at the hospital at the time of treatment. DOJ press release July 24, 1996
Dr. Schwartzman, MD and The Brooklyn Hospital Center - New York
$875,000 settlement to settle a qui tam suit ($25,000 by Dr. Schwartzman personally) for alleged false claims of having performed full medical exams on Social Security Administration disability applicants, when in fact only brief interviews were performed. QTQR January 1996
Dr. George Wied, M.D.
$400,000 to be paid by Dr. George Wied for allegedly misappropriating federal grant funds for cancer research. QTQR January 1998
Dr. Wurtzel, MD and Life Centers Limited - Pennsylvania
$500,000 paid by physician/owner of mental health clinic to settle a qui tam suit for allegedly fraudulently charging Medicaid for services never performed or otherwise not reimbursable. QTQR January 1996
1As our survey is limited to the years 1994-1996, this figure does not include some large settlements, such as the $100 million National Health Labs 1992 settlement, nor does it include the approximately $300 million settlement with Smith Kline Beecham expected to be announced imminently.
2 A few of these cases did not involve defense contracts, but were settlements made by defense contractors who are members of either the Aerospace Industries Association, the Shipbuilders Council of America, National Security Industrial Association or the Electronic Industries Association. These associations have each filed amicus briefs in Hughes Aircraft Company v. U.S. ex rel Schumer.
3 Henceforth noted as QTQR.
4 Henceforth noted as DCLR.
5 Henceforth noted as FCR.
6 Henceforth noted as DOJ.
7 Henceforth noted as DOD IG SAR.
8 The original suit was against the IBM Federal Systems Division, which was subsequently aquired by Loral Corporation and finally Lockheed Martin, where it is now known as Lockheed Martin Federal Systems.
9 Henceforth noted as DOJ HCFR.