Illinois Doctor Settles False Claims Act Lawsuit for $3.79 Million

March 11, 2015 — A federal anti-kickback statute makes it a crime to pay doctors to prescribe drugs that are reimbursed by federal healthcare programs such as Medicare and Medicaid. Since the Anti-Kickback Statute was amended in 2010, violations of this statute automatically violate the federal False Claims Act. When pharmaceutical manufacturers make improper payments to doctors, a physician’s judgment about a patient’s health care can be motivated more by the doctor’s financial gain than the patient’s best interests. The qui tam language of the False Claims Act gives health care workers and others who discover illegal kickback scams a way to bring a whistleblower lawsuit on behalf of the government. Informants keep a share of the government’s financial recovery.

Physician Allegedly Took $600,000 in Kickbacks to Prescribe Clozapine to Medicaid and Medicare Beneficiaries

Illinois doctor Michael J. Reinstein, MD, has agreed to pay $3.79 million to resolve a False Claims Act lawsuit alleging that he took $600,000 in kickbacks from two drug makers in return for prescribing clozapine for thousands of Medicaid beneficiaries in more than two dozen Chicago-area nursing homes. The prescriptions led to the submission of false claims to Medicaid and Medicare for the medication.
Although clozapine is useful for treating schizophrenia generally, the anti-psychotic drug is rarely prescribed for elderly patients because of its propensity to cause seizures, heart inflammation and a decrease in white blood cells. In August 2003, Reinstein nevertheless began to prescribe generic clozapine to so many of his patients that he became the number one prescriber of the drug in the country.
In a False Claims Act lawsuit, the U.S. government alleged that Reinstein accepting payments from pharmaceutical maker Teva Pharmaceuticals USA Inc. and IVAX LLC, its subsidiary. IVAX allegedly paid Reinstein $50,000 under a “consulting agreement” in violation of the Anti-Kickback statute applicable to Medicare and Medicaid. IVAX allegedly also sent the physician and his family on expense-paid travel to Miami.
Reinstein then reportedly filed or caused to be filed claims to Medicaid and Medicare for “pharmacologic management” of his elderly patients taking clozapine. The claims were allegedly false because the doctor’s prescription of clozapine was based not on Reinstein’s independent medical judgment but on his receipt of illegal kickbacks. Teva and IVAX have already paid $27.6 million to settle False Claims Act allegations involving payments to Reinstein in exchange for his prescription of clozapine.

Contact Us to File a Whistleblower Lawsuit Targeting Unethical Kickback Schemes

While Waters & Kraus is not handling this particular case involving Medicaid and Medicare fraud, we are representing whistleblowers in similar lawsuits. If you have comparable claims against a different pharmaceutical company or medical provider, contact us or call our qui tam attorneys at 800.226.9880 to learn more about our practice and how we can work together to notify the government about fraud and abuse. Our qui tam lawyers, such as Paul Lawrence in the firm’s Washington D.C. area office, are committed to advancing and protecting informants’ interests in whistleblower lawsuits.

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