Qui Tam

Chairman rejects nominee to board with Medicare fraud ties

By Brian F. LaBovick

Yesterday, the Chairman of Orthofix International, issued a strong statement about  a nominee for Orthofix Board, Steven J. Lee. In an open letter, Chairman, James F. Gero, outlined a long history of Mr. Lee's former company's unsavory history with qui tam litigation. Two of which, were Florida Based, Liberty Medical Supply and Liberty Home Pharmacy. Back in 2001, two qui tam, or whistleblower, lawsuits were filed in federal court in Miami and Boston against PolyMedica Corporation and its subsidiaries. These lawsuits alleged, that the subsidiaries violated the False Claims Act by submitting claims to Medicare without proper documentation of medical necessity, resulting in overbilling to federal health care programs.

In 2004, the company, paid $35 million to the United States government to resolve the fraud allegations, as well as to settle administrative sanctions related to the alleged misconduct. This settlement concluded an investigation lasting approximately five years that included on-site searches of PolyMedica’s subsidiary operations by FBI agents in response to federal search warrants, the removal of company documents, and subsequent shareholder lawsuits.

Two thumbs up for the Chairman publicly rejecting a man with a background that could possibly taint the image of his corporation, that he took an oath to uphold and to make better. In the wake of corporate greed and mismanagement, it is good to see that someone in corporate America still believes in integrity and ethics. There is an old saying that goes something like: "association brings assimilation".

Fraud and mismanagement of government funds should not be stood for in this day and age. Whistleblowers are speaking out and bringing the misdeeds of "greedy" corporations that try to squeeze more from the taxpayer and from the government. Good for Mr. Gero for stating that he and his board wanted no part of a man that was at the helm of a company that defrauded the government and had to pay $35 million in fines.

Click here to read more from Orthofix Chairman.

Full post as published by Whistleblower Law Blog on February 10, 2009 (boomark / email).