Originally authored by Kathryn E. Nelson

Novo Nordisk will pay $25 million to the U.S. Government to settle allegations of improper marketing of the anti-clotting drug NovoSeven. The complaint alleged that the company improperly promoted NovoSeven for indications not approved by the Food and Drug Administration.

Novo Nordisk also agreed to pay $1.725 million to the U.S. Government and four states to resolve allegations that its sales representatives paid Rite Aid pharmacists to recommend the diabetes drugs Novolin and Novolog.

Novo Nordisk made no admission of wrongdoing in either settlement.

Physician Alan Silber of West Bloomfield, Michigan and Detroit-area resident Hassan Reeves have been convicted in a Medicare fraud case. The scheme ultimately took $1 million from Medicare, and Silber was charged on six counts of Medicare fraud by a federal jury, following the week long trial of himself and Reeves.

Reeves played a role as a patient recruiter and was charged with one charge conspiracy to commit health care fraud and one count of conspiracy to pay health care kick backs. The two will be sentenced on August 6th of this year. Each count of conspiracy is worth up to 10 years in prison and a $250,000 fine, while the charge of conspiracy to pay health care kickbacks carries a maximum of only 5 years and $250,000.

The scheme was started by Denisse and Jose Martinez, the owners of the clinic, who have previously plead guilty for the scheme. According to reports, the clinic consistently billed Medicare for services that were neither performed or necessary. Evidence used in the trial showed that while many medications were prescribed, most were prescribed based on Medicare reimbursement policies and were never purchased or distributed to patients.

Denisse Martinez routinely filled out the diagnosis and treatment sections of patient folders, which Silber would then sign without examining patients or understanding their symptoms. Many of the medications prescribed were not medically necessary for the patients to whom they were prescribed and, in some cases, could have actually harmed patients if they had been taken.

The Health Care Fraud Enforcement Act of 2009, S. 1959, 111th Cong. (2009), if passed, would amend the Social Security Act to add that a violation of the Anti-Kickback Statute, 42 U.S.C. § 1320a-7b, is a false or fraudulent claim under the False Claims Act.  And, the provision defining a “federal health care offense” (18 U.S.C. § 24(a)), would include violations of the Anti-Kickback Statute.

In introducing the bill on October 28, 2009, Senator Ted Kaufman remarked, “By making all payments that stem from an illegal kickback subject to the False Claims Act, this bill leverages the private sector to help detect and recover money paid pursuant to these illegal practices.”

This new law, if passed, will strengthen the False Claims Act and undoubtedly enhance whistleblowers’ ability to recover for reporting kickbacks.