Pietragallo Expands Litigation Practice with New Hires

2021/04/12

In a significant expansion of the firm’s litigation practice, Pietragallo Gordon Alfano Bosick & Raspanti, LLP is pleased to announce the addition of four new associates to the firm’s Pittsburgh and Philadelphia Offices. “This is an exciting time for our firm as we continue to expand our litigation team and attract top talent in the legal market,” said Pietragallo Chairman William Pietragallo, II. “We are fully committed to providing our clients with the best possible talent and we are delighted to welcome this young and talented group of associates.” The group of four new associates includes: Stephen Raiola joins our Commercial Litigation team in our Pittsburgh office. Stephen brings our clients mid-level expertise in litigation and investigations, including product liability and mass tort, class actions, and commercial litigation. Before making the decision to return to Pittsburgh, Stephen spent five years with a leading international law firm in Washington D.C. Prior to Stephen’s move to D.C., he was an associate at an international law firm in New York City and clerked for Judge D. Michael Fisher on the United States Court of Appeals for the Third Circuit. He is a magna cum laude graduate of Georgetown University Law Center. Daniel P. Wotherspoon joins our Government Enforcement, Compliance, and White Collar litigation team in our Philadelphia office. Daniel brings our clients mid-level experience in white collar criminal defense and government investigations related to securities and False Claims Act matters. He joins us from a nationally based law firm and clerked for Judge Jane Richards Roth on the Third Circuit Court of Appeals. Daniel graduated cum laude from Villanova University School of Law. Christin M. Roberts joins our Government Enforcement, Compliance, and White Collar litigation team in our Pittsburgh office. Christin completed an internship in the Legal Department and Compliance Department at a leading global pharmaceuticals company where she concentrated her research on the False Claims Act and Whistleblower laws. Read More

Conducting Investigations During a Pandemic: The New Normal

March 19, 2020

Unfortunately fraud, waste, abuse, and of course, criminal activity do not take a vacation during a pandemic.  In fact, targets and methods of fraudsters can and will evolve much like a virus.  When the normal checks and balances that have been put in place by compliance, general counsel, security, internal audit, and other mechanisms that keep Corporate America safe are shuttered at home, criminal activity will increase.  Obviously, with travel bans and advisories – domestically and abroad – traditional investigations using standard time-honored interviewing techniques cannot proceed.  However, there are a number of things that can be done to preserve the investigative trail until robust measures can be put back in place to conduct an appropriate investigation. Modified Procedures Most defalcations can be detected through the normal means of analysis of emails, text messages, and electronic signatures.  It is important to be in touch with your clients’ IT departments and internal audit staff to be able to preserve evidence until such time as in-person investigation can occur.  There are a number of other things than can be done remotely to determine whether or not problematic anomalies are occurring or have occurred.  Things that may be secondary in the normal investigative check list now become primary.  Electronic communications, swipe-in logs and surveillance videos need to be reviewed and preserved.  Phone interviews are certainly better than no interview at all, but utilizing video conferencing of witnesses who may have relevant information is the preferred method to assess affect, attitude, and potential deception of a witness. Subjects of Investigation There is a critical distinction to observe in conducting an investigation in the midst of a pandemic.  Wrongdoers thrive both on the underlying medical crisis, as well as the vulnerabilities created by the reaction to the medical crisis.  Beginning with the medical crisis itself, creative fraudsters will sell fake vaccines, remedies, and attempt to swindle naïve and generous people into donating to fake charities.  Read More

Storm Clouds on the Horizon: Private Equity and the False Claims Act

2019/10/21

The United States recently filed a False Claims Act Complaint in Intervention against Florida-based compounding pharmacy Patient Care America (“PCA”), two PCA employees, as well as the private equity (“PE”) firm that acquired PCA and helped manage the company.1 The scheme alleged by the government was a common one: the payment of kickbacks for referrals of expensive compound drugs, which were often paid for by Tricare, a federal healthcare program. What was uncommon was the federal government’s intervention against a PE firm. The government’s efforts have paid off. On September 18, 2019, the government announced that it had settled the case, with the pharmacy and its private equity owner agreeing to pay over $21 million to the government.2 Similarly, in Commonwealth ex rel. Martino-Fleming v. South Bay Mental Health Center, Inc.,3 the relator filed suit against a mental health services provider and its PE firm owner. While the United States declined to intervene, the Commonwealth of Massachusetts intervened in the case and has sought to hold the PE firm liable.4 The Patient Care America and Martino-Fleming cases may reflect a renewed focus on PE firms in the False Claims Act (“FCA”) arena. While it remains to be seen whether the cases are omens, outliers, or indicative of a potentially more longstanding, but unstated, governmental focus on private equity,5 PE firms should proceed with caution when investing in and managing healthcare companies and other entities subject to FCA enforcement. Meanwhile, their counsel should endeavor to understand the unique financial and managerial dynamics that may place PE firms in the government’s crosshairs. Unlike, say, mutual fund investments, which a typical defense attorney is likely to fully grasp, private equity remains a niche investment area largely limited to institutional investors and high net worth individuals. Private equity operates in a fundamentally different manner than mutual funds and similar investments. Read More

Third and Final Settlement Announced in Philadelphia Whistleblowers’ $63 Million Case: Glenn Kline, D.O., Lancaster, PA Surgeon, Pays $4.25 Million to Resolve Allegations of Kickback Relationship with HMA

2019/10/03

The United States Attorney’s Office for the Eastern District of Pennsylvania (USAO E.D. Pa.) announced today that Dr. Glenn Kline, DO, a Lancaster, Pennsylvania-based general surgeon, together with his company, Community Surgical Associates, will pay $4.25 million, with interest, plus the whistleblowers’ attorney’s fees, to settle a longstanding Qui Tam lawsuit filed under the federal False Claims Act (“FCA”). The two whistleblowers, George E. Miller and Michael J. Metts, former Health Management Associates, Inc. (HMA) executives who worked at the company’s two Lancaster-based hospitals, will receive nearly 25% of the proceeds of the settlement or $1,054,000 for their significant contribution to the Government’s prosecution of their whistleblower claims.[1]  The Government did not file its own Complaint against Kline, but intervened today in the Relators’ Amended Qui Tam Complaint for purposes of this settlement. Dr. Kline’s Settlement Ends a Decade-Long, $63 Million Philadelphia Qui Tam Case  The whistleblowers, through their counsel at Pietragallo Gordon Alfano Bosick & Raspanti, LLP, brought their “qui tam” whistleblower lawsuit in June 2010 in federal court in Philadelphia.  It was assigned to the Honorable Mitchell S. Goldberg.  Their complaint raised allegations that HMA violated the Anti-Kickback Statute and the Stark laws by paying lucrative inducements to physicians and physician groups in exchange for a stream of millions of dollars of referrals to HMA’s two Lancaster, PA-based hospitals.[2] In Dr. Kline’s case, the whistleblowers alleged that in 2008, HMA’s Physician management group subsidiary paid excessive compensation to Dr. Kline ($1.2 million annually for a general surgeon in Lancaster) and absorbed $250,000 in costs related to Kline’s medical practice as kickbacks for patient referrals by Dr. Kline to HMA’s Lancaster hospitals. Under existing national guidelines, the median annual pay for a general surgeon at that time was just over $360,000. The whistleblowers further alleged that the illegal arrangement in effect in 2008 had been blessed by high-level executives at HMA. Read More

48 Arrested in Eastern Pennsylvania and New Jersey Involved in Health Care Fraud and Pill Mill Schemes

2019/09/27

A coordinated law enforcement effort among myriad federal, state and local law enforcement agencies in Pennsylvania and New Jersey resulted in the arrests of 48 defendants. Included in those arrested were doctors and medical professionals who, allegedly, submitted over $160 million in fraudulent insurance claims, caused losses of over $800 million and distributed over 3.25 million opioid pills. This law enforcement sweep reached across seven federal districts, including the Eastern District of Pennsylvania. In the Eastern District of Pennsylvania alone, 17 health care professionals were arrested on September 26 for allegedly submitting over $4 million in fraudulent claims and distributing over 738,000 oxycodone doses in pill mill clinics. Some doctors were charged with unlawful distribution of controlled substances for writing prescriptions that were outside the usual course of professional practice and not for legitimate medical purpose. According the Department of Justice, the FBI’s investigation revealed, that these medical doctors prescribed oxycodone to patients without examination or treatment. Defendants then knowingly submitted fraudulent claims to Medicare, health plans provided by the United States Office of Personnel Management (OPM) and Independent Blue Cross (IBC) for payment. In Philadelphia, one medical doctor, two unlicensed foreign medical school graduates and a nurse practitioner, were indicted on one count each of health care fraud and conspiracy  to distribute controlled substances for an alleged scheme which lasted 4 years. The medical doctor, Neil Anand, owned several non-pharmacy dispensaries which dispensed medications. He owned  Anand Medical Investment, Institute of Advanced Medical Surgery and Bucks County Spine and Pain Medicine. The indictment alleged that the dispensaries provided the patients with “goody bags” containing prescription medications based on the patient’s insurance coverage, not medications that the patients needed. It also alleged that the defendants did not provide doses or instruction for usage of the medications and required the patients to accept the medically unnecessary medications before the patient received the prescription of a Schedule II controlled substance. Read More