Case Type: Whistleblower/Qui Tam
Companies: Humana, Roche
Sanford Heisler Sharp, LLP announced that Indianapolis-based Roche Diagnostics Corp. and Roche Diabetes Care, Inc. (“Roche”) and Louisville-based Humana, Inc., Humana Pharmacy, Inc., and Humana Pharmacy Solutions, Inc. (“Humana”) have agreed to settle a False Claims Act lawsuit brought by a whistleblower relator (“Relator”) on behalf of the United States. Defendants will pay $12.5 million to settle the government’s claims, and the Relator will receive a 29% share of the settlement, totaling $3,625,000.
Sanford Heisler Sharp represents the Relator who filed the case in 2014 in the U.S. District Court for the Northern District of Illinois under the whistleblower provisions of the False Claims Act.
The Relator, a former employee of Roche Diagnostics, alleged that the Defendants violated the Anti-Kickback Statute and False Claims Act, causing false claims to be submitted to the Medicare Advantage program and defrauding taxpayers. Medicare Advantage health plans (sometimes called Medicare Part C) are Government-funded health plans that are administered by private companies known as Medicare Advantage Organizations.
“This case demonstrates that Medicare Advantage Organizations, pharmacy benefit managers, and pharmaceutical companies can be held responsible for giving or accepting payments in exchange for access to Medicare Advantage funds,” said Inayat Ali Hemani, New York Partner and Co-Chair of Sanford Heisler Sharp’s Whistleblower Practice. “Our client has helped the Government recover millions of dollars and shed light on secretive transactions between pharmaceutical companies and Medicare Advantage Organizations.”
Humana is a Medicare Advantage Organization that administers Medicare Advantage health plans. Humana Pharmacy is a mail order pharmacy that disburses pharmaceutical products to Humana’s members. Humana Pharmacy Solutions is a pharmacy benefit manager that contracts with pharmaceutical companies to arrange for Humana health plans’ pharmaceutical benefits. Roche manufactures and markets medical devices to monitor and manage blood sugar.
The Relator accused Humana and Roche of entering a kickback relationship where debt forgiveness was traded for access to government-funded Medicare business. Specifically, Relator alleged that Roche forgave millions of dollars owed by Humana in exchange for Humana purchasing Roche diabetes testing supplies and favoring Roche diabetes testing supplies over competitors’ products in Humana’s Medicare Advantage plans.
“The recovery obtained in this case is a testament to the power of whistleblowers in America,” said Michael D. Palmer, Partner in Sanford Heisler Sharp’s New York office. “This is truly an excellent result for both the Government and the Relator.”
After the Government declined to intervene, Relator and her counsel, Sanford Heisler Sharp, litigated the case on the Government’s behalf. After defeating Defendants’ motions to dismiss the case, Relator aggressively pursued discovery. In 2020, the parties filed motions on the merits of the case. While the motions were pending the Parties agreed to settle the case. The settlement is the first False Claims Act settlement arising from a Medicare Advantage Organization accepting a kickback from a pharmaceutical company
“Our client had the courage to hold Defendants accountable, at great personal risk. We are honored to have represented her and hope that others will continue to demonstrate similar courage and initiative,” said Kevin Sharp, Managing Partner of the firm’s Nashville office.