Neil Thompson in Star Tribune’s Whistleblower Series

This Sunday, Neil Thompson was featured on the front page of the Star Tribune as part of their Whistleblower series of reporting. From the article:

Secret, double life of a Walgreens druggist

In law school, Thompson had read about the False Claims Act. It dates to the Civil War, when President Abraham Lincoln wanted to encourage people to turn in war profiteers defrauding the government. Under the law, a tipster can get a cut of any money the government recovers with their help.

“I would have done it even if there wasn’t a reward,” said Thompson, 54. It’s patriotic. You should do it. It saves taxpayers’ money.”

More recently, that law has been used against drug companies, health care providers and others who have skimmed millions from immense federal entitlement programs such as Medicare and Medicaid. It’s an unusual process. A lawsuit is filed in secret, and the whistleblower becomes a federal informant. The law offers protection against retaliation if the company discovers the insider.

Thompson and Bieurance enlisted the help of three lawyers: Brian Wojtalewicz, James VanderLinden and Robert Christensen. In February 2005, they contacted the U.S. attorney in Minneapolis. The nation’s largest pharmacist, they said, had been overcharging taxpayers for at least six years. An investigation was started.

Read the entire article here.

Taking on Big Pharma

The following article is published with permission of Minnesota Lawyer – the original article can be read here.

by Michelle Lore Associate Editor

Qui tam actions allow whistleblowers to share in the government’s fraud recoveries

Qui tam isn’t just a foreign phrase, it’s a foreign concept to many trial lawyers around the state. But, as evidenced by the $9.9 million settlement of a Medicaid fraud claim against retail pharmacy giant Walgreen Co. late last month, qui tam cases can be very lucrative.

Qui tam cases are brought under the federal False Claims Act provision that permits whistleblowers who discover that fraud is being committed on the federal government to bring suit on behalf of the government and to receive a percentage of the recovery. The law is becoming a powerful litigation tool, particularly in the fight against Medicare and Medicaid fraud, although its also used in many other areas.

Appleton attorney Brian Wojtalewicz, who represented the whistleblowers in the Walgreen case, said that the case represents the third time the company is paying a multimillion dollar settlement on Medicaid fraud allegations.

“It’s just stunning how much Big Pharma is paying out in these settlements and the average American has no clue,” he said.

A team approach

The False Claims Act was enacted during the Civil War, primarily to enlist the help of citizens in the fight against fraudulent war industry profiteers. The act has been amended twice, and currently allows the government and whistleblowers (or relators) to recover up to three times the amount of the fraud, plus penalties and attorney fees.
Prior to filing a qui tam claim, the relator must bring the case to the government. According to St. Louis Park attorney Robert Christensen, an attorney for the relators in the Walgreen case, it can be a challenge to convince the Department of Justice that the claim has viability.

“There is a lot of work that needs to be done before you even approach the government,” he said. “Because they have limited resources and time, you’ve got to have your case lined up real well before you go to the government.”

The suit is filed under a 60-day seal and served on the DOJ and the U.S. Attorney in the jurisdiction it’s filed. Unless the federal government immediately decides not to be involved, it invariably requests an extension of the seal.

“[The government] takes a good look at us to see if this is just sour milk or if there is some negative motive on the part of the whistleblowers that really doesn’t have to do with fraud,” said Wojtalewicz. “Then they will investigate it to see if it’s a solid case, a big case, a little case, what problems there are with it.”

If the government declines to intervene, the relators may proceed on their own. If the government decides it’s a good case, however, it requests a partial lifting of the seal, allowing it to confront the defrauding company, and, if possible, negotiate a settlement.

“It is the government’s [job],” said Christensen. “They make it very clear to you that its their money and their case.”

If the government reaches a settlement, the relators can ask the judge to reject it, although that’s an uphill battle.

“Historically those requests by the whistleblowers and their lawyers are rarely if ever granted, and ordinarily the federal judges OKs what the federal government wants to do,” said Wojtalewicz.

Under the law, whistleblowers recover between 15 percent and 30 percent of the amount collected from the corporation. If the government intervened, the relator gets between 15 and 25 percent of the recovery. But if the government did not intervene and the relator goes on to settle the case or take it successfully to trial, the relator gets 25 to 30 percent. The exact percentage is up to the judge.

“It’s very common for the government and the whistleblower to end up fighting, or at least negotiate [the percentage],” said Wojtalewicz. “Sometimes its gets to an outright fight and they go in front of a judge and shoot it out.”

Walgreen case

In the Walgreen case, two pharmacists, Neil Thompson (who is also a practicing lawyer) and Dan Bieurance, alleged that in 1999 the company began a billing system designed to cheat Medicaid on prescription charges.

The two notified the government of their allegations and in early 2005, sued Walgreen in U.S. District Court in Minnesota under the federal False Claims Act. (They also brought suit in state court in three states where the alleged fraud also took place — Massachusetts, Michigan and Florida — which have their own have false claims act statutes.)

Over the next several years, the U.S. government requested numerous extensions of the order sealing the file while it investigated, intervened and negotiated a settlement with the company. According to Wojtalewicz, the most time-consuming aspect of the case for the relators and their attorneys was conducting the damage analysis, particularly finding and working with the medical and pharmaceutical billing experts.

Under the settlement, Minnesota will get $1.47 million, while Thompson and Bieurance will receive $1.44 million plus attorney fees. The relators contemplated challenging the settlement but decided against it.

“That’s not unusual. Whistleblowers very often think the settlement should be larger than what the government ultimately reaches with the defendants,” Wojtalewicz noted.

Sidelined

Those who handle qui tam claims say it’s tough to give up control of their cases to the government.

“You put work into it, especially at the outset, and then you turn it over and if the feds take it they are running the show,” said Wojtalewicz. “And you don’t always agree with what they’re doing so it can be frustrating that way.”

St. Louis Park attorney James VanderLinden, who also worked in the Walgreen case, explained that once the government takes over, the role of the relators and their attorneys is primarily to feed information to the government attorneys. “We’re just giving this stuff to the U.S. Attorney and that continues into settlement negotiations, right up to the very end,” he said.

Sitting on the sidelines during the negotiation phase is probably the most difficult part, especially for seasoned trial attorneys.

“It’s really odd for trial lawyers to have to do that, sit there,” said Wojtalewicz. “And, of course, we are constantly second-guessing the federal lawyers — are they being aggressive enough?”

Despite that lack of control, attorneys say the claims are worthwhile,  especially since they usually involve widespread fraud schemes.

“These cases always have the potential of being multimillion dollar cases, with the penalties and the trebling of damages,” said VanderLinden.

Moreover, knowing they are helping to end a fraud that’s costing taxpayers millions of dollars is personally rewarding.

“You have whistleblowers who are sticking their necks out professionally, and you have large corporations essentially pulling off fraud schemes and getting away with it until they get turned in,” Wojtalewicz said.

Christensen said the Walgreen case, his first qui tam claim, was a reminder to him of the personal risks that relators — in these and other types of whistleblower cases — take to pursue their claims.

“You could say that this is all about the money but that’s not true,” he said. “There is a huge investment of emotion and risk, and need to do the right thing. Our clients are going to carry that with them well beyond this settlement.”

Small Pharmacy Chain Does the Right Thing

With Medicare and Medicaid fraud becoming more and more prevalent it is imperative that whistleblowers like Dan Bieurance and Neil Thompson do the right thing when companies like Walgreens repeatedly over-bill taxpayers. Not all pharmacy chains are as suspect. Take The Stop & Shop Supermarket Company (Stop & Shop), which recently voluntarily reported and returned $269,000 to the Massachusetts Medicaid Program.

From the Press Release:

Stop & Shop…discovered during an audit in 2006 that it had not reported the lowest price it had accepted for certain prescription drug products to MassHealth.  By not reporting the lower prices to MassHealth, Stop and Shop was overpaid by $269,000.  Massachusetts law requires pharmacies to charge Medicaid no more than the lowest price they are willing to accept from any “payer.”  If the pharmacies’ price is lower than the price calculated by the state’s pricing formula, then the state will pay the lowest price.

It is encouraging to see companies self-policing themselves and doing the right thing for their companies and American tax payers. When companies do engage in fraud, either as a mater of practice or oversight, whistleblowers must come forward to do the right thing for them.

Star Tribune article on Walgreens Settlement

The Star Tribune has an article about the Walgreens settlement.

From the article:

Walgreens has paid the United States and Minnesota and three other states nearly $10 million to resolve allegations of falsely billing Medicaid, the U.S. Justice Department announced Monday, with some of that money going to two Twin Cities pharmacists who turned in the industry giant.

The United States initiated the investigation in response to a lawsuit brought by pharmacists Daniel Bieurance and Neil Thompson.

As a result of the settlement, the pharmacists will divide $1.44 million out of the $9.9 million recovery.

Read more from the article.

Walgreens to Pay $9.9 million in Medicaid Fraud Case

Neil Thompson and Daniel Bieurance, as Relators for the United States V. Walgreen Co.

Walgreen Co., the giant retail pharmacy chain, has agreed to pay $9.9 Million to settle a whistleblower lawsuit accusing it of Medicaid fraud. This is the third time that Walgreens is paying a multi-million dollar settlement on Medicaid fraud allegations.

THE FRAUD

According to their False Claims Act lawsuits, Walgreen pharmacists Neil Thompson and Dan Bieurance in Minnesota brought evidence to the government that in 1999, Walgreen’s started a billing system for its pharmacies that was designed to cheat Medicaid on prescription charges.

It was done in relation to dual-eligible customers — those legitimately on Medicaid who also maintained their private health insurance coverage. The insurance coverages required Walgreen to charge the insurance company a smaller amount for prescriptions, and a limited co-pay from the customer. When a person is allowed Medicaid coverage, the government always obtains an assignment of the person’s rights under their private health insurance coverage. The government essentially takes over the citizen’s rights under the coverage. This includes the common right to pay a smaller amount for co-pay on prescriptions.

Pharmacists Thompson and Bieurance claimed in their federal and state lawsuits that Walgreen should only have billed the Medicaid program the same limited co-pay on prescriptions that it would have normally billed the customer under the insurance plan. They alleged that Walgreen designed a software program and tutorial for its pharmacists that consistently overcharged Medicaid on these co-pays. They claimed that these overcharges occurred on hundreds of thousands of prescription sales for well over five years.

The $9.9 Million settlement reached covers over-billings by Walgreen in the states of Minnesota, Massachusetts, Michigan and Florida.

When Neil Thompson and Dan Bieurance began with Walgreen, older, experienced pharmacy supervisors and managers instructed them on how to circumvent the Walgreen’s dual-eligible software to make sure Medicaid was not being over-billed on the co-pays.  However, both pharmacists claimed that by 2004, they were noticing that other pharmacists and technicians of Walgreen were using the program as directed by the company, resulting in the wrongful over-billing of Medicaid.  They complained internally but were commanded to do the billing according to the software anyway.  They then retained counsel experienced in the federal and state government False Claims Acts, and brought their whistleblower lawsuit in early 2005.  The lawsuit stayed under seal (non-public), according to the False Claims Acts, and court orders, until the announcement of this settlement.

Whistleblowers Thompson and Bieurance and their attorneys will receive $1,446,658. as their reward under the federal and state False Claims Acts.  They are also entitled to receive attorney fees from Walgreen Co.

STATE MEDICAID AGENCIES

Only Walgreen had the information necessary to reveal the correct, legal price established by the contracts of Walgreen with the insurance companies or related Pharmacy Benefit Manager Companies (PBMs).  The states’ Medicaid agencies likely did not have this information.  The Medicaid program is jointly financed by the Federal and State governments, on approximately a 50-50 basis.  It is administered by an agency in each state.  Some state Medicaid agencies were aware of this wrongful billing potential, and directly addressed it in their rule making.  Others have missed the fraud potential entirely.

OTHER PHARMACY CHAINS DOING IT RIGHT

Neil Thompson, who is a licensed Minnesota lawyer, also worked for pharmacies of Snyder and Target in the past.  These pharmacy chains billed Medicaid correctly on dual-eligible billing of Medicaid.  Mr. Thompson and Mr. Bieurance also believe from communications with other pharmacists that Wal-Mart, K-Mart and Rite-Aid also likely bill Medicaid correctly on dual-eligible customers.

THE RELATORS

Neil P. Thompson is uniquely qualified to observe and analyze fraud in the pharmaceutical industry, as a licensed attorney experienced with class action litigation involving pharmacy pricing and the Federal and State False Claims Acts, and a licensed pharmacist for 31 years, both as a pharmacy owner and working for over 130 different chain pharmacy locations. He also has important familiarity with the pharmacy field involving the nursing home, marketing and pharmacy benefit manager industries.  He continues to work in a Walgreen pharmacy in Minneapolis, Minnesota, one mile from where he also has his law firm.

Daniel J. Bieurance has been a licensed pharmacist since 1996, when he received his pharmacy degree from the University of Wisconsin in Madison.  Prior to that, he worked as a pharmacy technician for Walgreen for 3 years.  After this False Claims Act case was started under court seal, he left Walgreen for another pharmacy position in Minnesota.

GOVERNMENT ATTORNEYS AND AGENTS

The government team on the investigation, negotiations and settlement was led by D. Gerald Wilhelm, Assistant United States Attorney in Minnesota and Amy Easton, Trial Attorney in the Department of Justice, Civil Division, in Washington, D.C., with assistance from Gretchen Wallace, Assistant Attorney General in Florida, Robert Patten, Assistant Attorney General in Massachusetts and Elizabeth Valentine, Assistant Attorney General in Michigan.

Special Agent Gary Nelson of the federal Health and Human Services Office of Inspector General, and Debie Tsuchiya, an investigator with the Minnesota Medicaid Fraud Control Unit, provided good assistance to the lawyers for the government in the investigation.

WALGREEN CO.

Walgreen Co., the nationwide retail pharmacy giant, operates with over 6000 stores across America.  It markets itself as “The Pharmacy that America trusts.” This is the third False Claims Act Medicaid fraud lawsuit that Walgreens has settled, each time for millions of dollars. (See the prior cases of Lusitza v. Walgreen Co. and California by Relator Mueller v. Walgreen Corp.). In 2007, Walgreen had net sales of $53 billion.  It is headquartered in Deerfield, Illinois.

THE FALSE CLAIMS ACTS

The original federal False Claims Act was made law by Abraham Lincoln and the Civil War Congress, to enlist citizen whistleblowers in the fight against fraudulent war industry profiteers.  It empowers citizens by giving them a reward, and substantial legal rights against retaliation by employers.  In its present form, the government and whistleblowers can recover up to three times the amount of the fraud, plus substantial penalties and attorney fees.  Whistleblowers (who are called “relators” under the law) may recover from 15% to 30% of the amounts collected from the frauding corporation.  At least 22 states have passed their own similar false claims acts, and many other states are in the process.  The government has recovered billions of dollars against frauding corporations, especially since the 1986 amendments to the federal law. Important changes to the law are being considered by Congress, and would strengthen the ability of the government and honorable citizens to hold corporations committing fraud to account. Medicaid and Medicare fraud, along with military contracting fraud, are the largest areas for recoveries, but ethical citizens have exposed fraud in the education, environmental and transportation fields, and nearly all other areas of federal spending.

THE LAWYERS

The lawyers representing the whistleblower/relators are Robert Christensen, James VanderLinden and Brian Wojtalewicz, all of whom are certified civil trial specialists.  All three have over 30 years of trial lawyer experience, and have been voted Super Lawyers in surveys of Minnesota lawyers.  You can visit their website at false-claims-act.com

Brian Wojtalewicz
Wojtalewicz Law Firm, Ltd.
Appleton, MN 56208
1-800-377-1812
brian@wojtalewiczlawfirm.com
wojtalewiczlawfirm.com

Robert P. Christensen, PA
Advocates for Justice™
St. Louis Park, MN 55416
(612)333-7733
rpchristensen@visi.com
rpcmnlaw.com

James G. VanderLinden
LeVander & VanderLinden, P.A.
St. Louis Park, MN 55416
(952)767-6841
jim@vanderlindenlaw.com
vanderlindenlaw.com