Investigation Newsletter: Drugmaker Settles $ 50 Million Opioid Lawsuit in New York City | Arent Renard
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Drugmaker settles $ 50 million opioid lawsuit in New York
The New York attorney general’s office has announced that drugmaker Endo Health Solutions has agreed to pay $ 50 million to resolve a lawsuit brought by New York State as well as two New York counties alleging Endo ( and other major drug manufacturers) had marketed and sold prescription opioids. The announcement was made amid an ongoing trial in the Suffolk County State Supreme Court that began in June. The settlement does not include any admission of wrongdoing on the part of Endo or its affiliates.
The settlement came after allegations that Endo and his lawyers, Arnold & Porter, concealed key evidence of improper marketing. Following the settlement, a pending motion seeking default against Endo for the discovery violations is now moot. A petition for sanctions against Arnold & Porter remains pending.
Four defendants are still pending and face over $ 1 billion in damages.
The New York Attorney General’s announcement is here.
Government intervenes in FCA lawsuit alleging submission of unsubstantiated diagnoses to Medicare Advantage plans
On September 14, 2021, DOJ announced that the government had intervened in a qui tam lawsuit in US District Court for the Western District of New York against Independent Health Association, Independent Health Corporation, DxID LLC (DxID) and former CEO of DxID. The complaint alleges that the defendants submitted or caused the submission of false information about patients enrolled in Medicare Advantage plans in order to inflate reimbursements.
Medicare Advantage plans provide benefits to Medicare patients and receive a fixed payment amount per registrant. The plans also receive an upward payment adjustment based on the demographics and health status of the beneficiaries. Generally, the more severe a recipient’s diagnosis, the higher the “risk score” and the higher the risk-adjusted payment for that recipient.
Government alleges DxID used diagnostic codes that were not supported by a patient’s medical records, and incorrect coding inflated beneficiaries’ risk scores, leading to increased payments to Medicare Advantage plans . The government also alleges that DxID required providers to sign addendum forms up to a year after a patient visit, and used those addenda to justify coding of unsupported diagnosis. DxID has reportedly received contingency fees of up to 20% of the excess portion of reimbursements received by Medicare Advantage plans.
The DOJ announcement is here.
Florida cardiologist agrees to pay $ 6.75 million to resolve FCA lawsuit
An Orlando-based cardiologist settled a False Claims Act lawsuit alleging he performed medically unnecessary ablations and venous stent procedures for $ 6.75 million. The government alleged that the cardiologist knowingly submitted false statements to federal health care programs for ablations and stenting procedures on veins that did not qualify for treatment to accepted standards of care. In order to justify the procedures, the cardiologist allegedly falsified patients’ medical records to overestimate the degree of reflux and the diameter of the veins, and distorted the patient’s symptoms. The government also alleged that the procedures were often performed exclusively or primarily by ultrasound technicians, outside of their scope of practice. As part of the settlement, the cardiologist and his office will enter into a multi-year integrity agreement with the HHS-OIG that requires regular training and reporting, as well as a quarterly review of complaints by an independent review body.
The DOJ announcement is here.