Case Document 1 Filed 06/19/17 Page 1 of 75 PageID 1

 

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS

 

5: g; 
TEXARKANA DIVISION behalf of the Civil Action No. 7
UNITED STATES OF AMERICA, et al.,
Plaintiffs/Relator,
COMPLAINT JURY DEMAND
v.
Filed Under Seal Pursuant to
31 U.S.C. 3730(b)(2)
Defendants.

 

 

FILED UNDER SEAL

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Case Document 1

 

HEALTH CHOICE GROUP, on behalf of
the UNITED STATES OF STATE
OF STATE OF 
STATE OF 

STATE OF STATE OF
DISTRICT OF 
STATE OF STATE OF 
STATE OF STATE OF 
STATE OF STATE OF 
STATE OF STATE OF
COMMONWEALTH OF
STATE OF 
STATE OF STATE OF
STATE OF STATE OF
NEW STATE OF NEW 
STATE OF NEW STATE OF NEW
STATE OF NORTH 
STATE OF STATE OF RHODE
STATE OF 

STATE OF STATE OF 
COMMONWEALTH OF and
STATE OF WASHINGTON,

Plaintiffs/Relator,
V.
BAYER AMGEN INC. 
ONYX 
AMERISOURCEBERGEN 
and LASH GROUP,

Defendants.

 

 

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Filed 06/19/17 Page 2 of 75 PageID 2

Civil Action No.
COMPLAINT AND JURY DEMAND

Filed Under Seal Pursuant to
31 U.S.C. 3730(b)(2)

Case Document 1 Filed 06/19/17 Page 3 of 75 PageID 3

The United States of America (the ?United States?) and the Plaintiff States (the United
States and Plaintiff States are collectively referred to herein as the ?Government?), by and
through their qui tam Relator Health Choice Group, LLC (the ?Relator?), allege:

PRELIMINARY STATEMENT

1. This is a civil action brought on behalf of the Government under the Federal False
Claims Act, 31 U.S.C. 3729 3733 (the ?False Claims Act? or and the false claims

acts of the respective Plaintiff States1 to recover treble damages sustained by and civil penalties

 

1 The state statues are the: (1) Arkansas Medicaid Fraud False Claims Act, Ark. Code
Ann. 20-77-901 911 (as amended by 2017 Arkansas Laws Act 978 (SB. 564)); (2)
California False Claims Act, Cal. Gov?t Code 12650 12656; (3) Colorado Medicaid False
Claims Act, Colo. Rev. Stat. Ann. 25.5-4-3035 - 4-310; (4) Connecticut False Claims and
Other Prohibited Acts Under State-Administered Health or Human Services Programs Act,
Conn. Gen. Stat. Ann. 4274 289; (5) Delaware False Claims and Reporting Act, Del. C.
Ann. tit. 6, 1201 1211; (6) District of Columbia Medicaid Fraud Enforcement and Recovery
Amendment Act of 2012, DC. Code Ann. 2?381.01 381.10; (7) Florida False Claims Act,
Fla. Stat. Ann. 68.081 68.092; (8) Georgia False Medicaid Claims Act, Ga. Code Ann. 
49-4?168 4-168.6; (9) Hawaii False Claims to the State Act, Haw. Rev. Stat. Ann. 661-21 
31; (10) Illinois False Claims Act, 740 Ill. Comp. Stat. Ann. 175/1 175/8; (11) Indiana False
Claims and Whistleblower Protection Act, Ind. Code Ann. 5-11-5.5-1 55-18; (12) Iowa
False Claims Act, Iowa Code Ann. 685.1 685.7; (13) Louisiana Medical Assistance
Programs Integrity Law, La. Stat. Ann. 437.1 440.16; (14) Maryland False Claims Act, Md.
Code Ann. Health-Gen. 8-101 111; (15) Massachusetts False Claims Law, Mass. Gen. Laws
Ann. ch. 12, 5A 50; (16) Michigan Medicaid False Claim Act, Mich. Comp. Laws Ann. 
400.601 400.615; (17) Minnesota False Claims Act, Minn. Stat. Ann. 15C.01 - 
(18) Montana False Claims Act, Mont. Code. Ann. 17-8-401 416; (19) Nevada Submission
of False Claims to State or Local Government Act, Nev. Rev. Stat. Ann. 357.010 357.250;
(20) New Hampshire Medicaid Fraud and False Claims Act, N.H. Rev. Stat. Ann. 167:61-b 
61-e; (21) New Jersey False Claims Act, NJ. Stat. Ann. - (22) New
Mexico Medicaid False Claims Act, N.M. Stat. Ann. 27?14-1 14-15; (23) New Mexico
Fraud Against Taxpayers Act, NM. Stat. Ann. 44-9-1 9?14; (24) New York False Claims
Act, N.Y. Fin. Law 187 194; (25) North Carolina False Claims Act, NC. Gen. Stat. Ann. 
1-605 618; (26) Oklahoma Medicaid False Claims Act, Okl. Stat. Ann. tit. 63, 5053 5054;
(27) Rhode Island State False Claims Act, RI. Gen. Laws Ann. 9-1.1-1 -1.1- 9; (28)
Tennessee False Claims Act, Tenn. Code Ann. 4-18-101 108; (29) Tennessee Medicaid
False Claims Act, Tenn. Code Ann. 71-5?181 - 185; (30) Texas Medicaid Fraud Prevention
Law, Tex. Hum. Res. Code Ann. 36.001 36.132; (31) Vermont False Claims Act, Vt. Stat.
Ann. tit. 32, 630 a 642; (32) Virginia Fraud Against Tax Payers Act, Va. Code Ann. 8.01-

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and restitution owed to the Government as a result of a multi-tiered kickback scheme involving
defendants Bayer Corporation (?Bayer?), Amgen, Inc. and its subsidiary Onyx Pharmaceuticals,
Inc. (Amgen and Onyx collectively referred to as ?Amgen?), AmerisourceBergen Corporation
(?Amerisource?), and Lash Group all collectively referred to herein as ?Defendants.?

2. Defendants? unlawful conduct involves l) Betaseron, a Bayer product approved
for the treatment of multiple sclerosis and (2) Nexavar, a product co?marketed by Bayer,
Amgen, and Onyx and approved for the treatment of cancer. Collectively, Betaseron and
Nexavar are referred to herein as the ?Covered Products.?

3. To enrich themselves at the expense of the Government, Bayer and Amgen, with
substantial assistance from Amerisource and Lash, engaged in three intertwined, unlawful
marketing schemes for the Covered Products.

4. First, with assistance from Lash and Amerisource, Bayer and Amgen provided in?
kind remuneration to Prescribers2 in the form of free nursing services to induce them to prescribe
the Covered Products to their patients.

5. Second, Bayer and Amgen contracted with and paid remuneration to Amerisource
and Lash to deploy nurse educators to recommend Betaseron and Nexavar to Prescribers and
patients. While purporting to provide independent medical advice and disease-awareness
information, the nurse educators were in reality acting as undercover sales reps for Bayer and
Amgen, focused on the singular mission they were paid to accomplish: refer the Covered

Products to Prescribers and patients.

 

216.1 216.19; and (33) Washington Medicaid Fraud False Claims Act, Wash. Rev. Code Ann.
74.66.005 74.66.130.

2 As used herein, the term ?Prescriber? refers to any physician or Advance Practice
Provider authorized to write prescriptions, as well as their employers.

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6. Third, with assistance from Lash, Bayer and Amgen provided in?kind
remuneration to Prescribers in the form of reimbursement support services, saving Prescribers
thousands of dollars in administrative expenses. These reimbursement support services were

provided to induce Prescribers to prescribe the Covered Products to their patients.

7. the rederal Anti-Kickback Statut-, 42 U.S.C. 1320a?7b (the expressly
prohibits any individual or entity from offering, paying, soliciting, or receiving any
?remuneration,? Which includes ?any kickback, bribe, or rebate,? to ?any person to induce such
person? to purchase or recommend a drug or service that is covered by Medicare or Medicaid.
Id. Further, the US. Department of Health and Human Services (the has repeatedly
warned pharmaceutical companies that they should refrain from engaging in marketing or
promotional activities that rely on individuals involved in the delivery of healthcare or on the
provision of free services such as billing, nursing, or other staff services. See, ag, 56 Fed. Reg.
35952?01, 35981 (July 29, 1991); 59 Fed. Reg. 65372?01, 65376 (Dec. 19, 1994).

8. Although Bayer and Amgen, as well as their co-defendants, knew that the AKS
prohibited them from giving kickbacks to promote the Covered Products, Defendants
disregarded the law, choosing instead to put sales growth and pro?ts before their duties to
comply with the law and ensure patient safety and integrity in the healthcare marketplace. Tens
of thousands of patients were prescribed the Covered Products not based on clinical ef?cacy or
patient-speci?c information, but rather as a result of the unlawful, substantial kickbacks Bayer
and Amgen offered Prescribers.

9. Based on Defendants? illegal marketing and promotion schemes, pharmacies have

submitted and continue to submit claims to Medicare and Medicaid that were tainted by

kickbacks, causing these programs to pay billions of dollars in improper reimbursements.

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JURISDICTION AND VENUE
10. This Court has {jurisdiction over the Government?s claims pursuant to 28 U.S.C.
1331 and 1345.
11. This Court may exercise personal jurisdiction over Bayer, Amgen, Onyx,

Ame_isource, and Lash because a substantial part of the acts giving rise to the Government?s
claims occurred Within the State of Texas.

12. Venue is proper in this District pursuant to 31 U.S.C. 3732(a) and 28 U.S.C. 
1391(b) and 1391(0) because Bayer, Amgen, Onyx, Amerisource, and Lash each transact
business in this District and/or, in furtherance of its fraudulent kickback schemes, caused to be

submitted or conspired to submit false claims in this District.

THE PARTIES

13. Bayer is an American subsidiary of Bayer AG, a German multinational chemical
and pharmaceutical company headquartered in Leverkusen, Germany. Bayer is the world?s
sixteenth largest pharmaceutical company with estimated revenues of $15.5 billion in 2014.3

14. Amgen is an American multinational biopharmaceutical corporation
headquartered in Thousand Oaks, California. According to its website, Amgen is the world's
largest independent biotechnology ?rm.

l5. Onyx is a biopharmaceutical company headquartered in San Francisco, CA.

Onyx is a subsidiary of Amgen. According to a Press Release on Amgen?s website, Onyx has at

 

3 0p 25 Pharma Companies, PMLive,
(last visited June 15, 2017).

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least two partnered oncology assets with Bayer, one of which is Nexavar, a Covered Product.4
16. Amerisource is a corporation headquartered in Chesterbrook, PA. According to
its website, Amerisource provides services from product commercialization and distribution to

pharmacy, provider, and manufacturer solutions. In 2015, Amerisource?s revenue was $135

14. Lash is a healthcare consulting ?rm headquartered in Fort Mill, South Carolina.
According to its website, Lash offers both clinical nurse educator services as well as
reimbursement support services. Lash is a subsidiary of Amerisource. A case study on Lash?s
website boasts about its nurse educator services: ?Lash Group?s nurse educators opened doors to
areas that are typically not open to drug manufacturers? sales representatives, such as hospitals
and clinics.?6 In fact, the case study is named ?Nurse Educators Helped Boost New Product
Adoption.?

15. Relator Health Choice Group, LLC is an af?liate of the National Healthcare
Analysis Group a research organization based in New Jersey. Each year, NHAG
representatives conduct hundreds of interviews of participants in the healthcare marketplace 
nurses, sales reps, of?ce managers, administrators, reimbursement support personnel, etc. to

form an understanding of industry practices.

 

4 Arngen Press Release, Amgen to Acquire Onyx Pharmaceuticals, for $25 Per Share in
Cash (Aug. 25, 2013), 
newsArticle&ID21849611 (last visited June 17, 2017).

5 Amerisourcebergen Corp., Annual Report (Form 10-K) at 24 (Nov. 24, 2015),
1 

(last visited June 15, 2017).

6 Case Study: How Nurse Educators Helped Boost New Product Adoption, Lash Group,
at 2 (Summer 2011), (last

visited June 15, 2017).

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16. Relator brings this action on behalf of the Government pursuant to the gut tam
provisions of the federal False Claims Act, 31 U.S.C. 3729 3733 and the false claims acts of

the respective Plaintiff States.

STATUTORY BACKGROUND

1.7. relevant part, the FCA, .31 U.S.C. 3729( A) (C), establishes treble

damages liability to the United States for any individual or entity that:

knowingly presents, or causes to be presented, a false or fraudulent claim
for payment or approval; or

knowingly makes or uses, or causes to be made or used, a false record or
statement material to a false or fraudulent claim; or

conspires to commit a violation of [the foregoing paragraphs].

Within the meaning of the FCA, ?knowingly? is de?ned to include reckless disregard and
deliberate ignorance. 31 U.S.C. 3729(b)(1). In addition to treble damages, the FCA also
provides for assessment of a civil penalty for each violation or each false claim.

18. In relevant part, the AKS, 42 U.S.C. 1320a-7b, provides as follows:

Illegal Remunerations.

Whoever knowingly and willfully solicits or receives any
remuneration (including any kickback, bribe, or rebate) directly or
indirectly, overtly or covertly, in cash or in kind?

(A) in return for referring an individual to a person for the
furnishing or arranging for the furnishing of any item or service for
which payment may be made in whole or in part under a Federal
health care program, or

(B) in return for purchasing, leasing, ordering, or arranging for or
recommending purchasing, leasing, or ordering any good, facility,
service, or item for which payment may be made in whole or in
part under a Federal health care program,

shall be guilty of a felony and upon conviction thereof, shall be ?ned not more
than $25,000 or imprisoned for not more than ?ve years, or both.

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(2) Whoever knowingly and willfully offers or pays any remuneration
(including any kickback, bribe, or rebate) directly or indirectly, overtly
or covertly, in cash or in kind to any person to induce such person??

(A) to refer an individual to a person for the furnishing or
arranging for the furnishing of any item or service for which
payment may be made in whole or in part under a Federal health

care program, or

(B) to purchase, lease, order, or arrange for or recommend
purchasing, leasing, or ordering any good, facility, service, or item
for which payment may be made in whole or in part under a
Federal health care program,

shall be guilty of a felony and upon conviction thereof, shall be ?ned not more
than $25,000 or imprisoned for not more than ?ve years, or both.

19. For purposes of the AKS, ?remuneration? includes the transfer of anything of
value, whether cash or in-kind consideration, directly or indirectly, covertly or overtly.
Importantly, the statute has been interpreted to cover any arrangement where one purpose of the
remuneration is to obtain money for referral of services or to induce further referrals.

20. The AKS is designed to, among other things, ensure that patient care will not be
improperly in?uenced by inappropriate compensation from the pharmaceutical industry, and that
healthcare professionals remain free of con?icts of interest that could impact treatment decisions.

21. To ensure compliance, every federally-funded health care program requires every
provider or supplier to ensure compliance with the provisions of the AKS and other federal laws
governing the provision of health care services in the United States.

22. The AKS was amended in March 2010 as part of the Patient Protection and
Affordable Care Act which clari?ed that all claims resulting from a violation of the
AKS constitute violations of the FCA. 42 U.S.C. The PPACA also makes clear
that violations of its anti-kickback provisions, like violations of the FCA, may occur even if an

individual does ?not have actual knowledge? or ?speci?c intent to commit a violation.? Pub. L.

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No. 111-148, 124 STAT. 759 6402 (adding new section, ll28J(h)).
23. Knowingly providing kickbacks to Prescribers to induce them to prescribe a drug
(or to in?uence prescriptions) to individuals who seek reimbursement for the drug from a federal

Government healthcare program or causing others to do so, While certifying compliance with the

I 1 
1

or wune causing auut er 0 so certify

these laws, violates the FCA.

24. A violation of the AKS constitutes a felony. Any party convicted under the AKS
must be excluded from federal health care programs for a term of at least ?ve years. 42 U.S.C. 


25. Compliance with the AKS is required for reimbursement of claims from federal
health care programs, and claims made in violation of the law are actionable civilly under the
FCA. 42 U.S.C. 1320a?7b(g) (stating, in part, that ?a claim that includes items or services
resulting from a violation of . . . [the constitutes a false or fraudulent claim for purposes of
[the see also United States ex rel. Wilkins v. United Health Grp.., Inc, 659 F.3d 295,
313 (3d Cir. 2011) (stating that ?[c]ompliance with the AKS is clearly a condition of payment
under Parts and of Medicare?).

26. The AKS contains statutory exceptions and certain regulatory ?safe harbors? that
exclude certain types of conduct from the reach of the statute. See 42 U.S.C. 
None of the statutory exceptions or regulatory safe harbors protect Defendants from liability for
the conduct alleged herein.

27. Each of the Plaintiff States has enacted statutes that are parallel to the legislative

scheme embodied in the FCA and the AKS.

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AFFECTED HEALTH PROGRAMS

28. Generally, when a Prescriber prescribes one of the Covered Products, a patient is
provided with a prescription that is then ?lled at a pharmacy. The pharmacy then submits the
claim for payment to the relevant federal health care pro gram(s) for reimbursement.

29. In certain circumstances, a federal program may also have pharmacy facilities that
directly dispense prescription drugs. In such cases, the federal health care program purchases the

drug directly rather than reimbursing the pharmacy.

Medicare

30. Medicare is a federal program that provides federally?subsidized health insurance
primarily for persons who are 65 or older or are disabled. See 42 U.S.C. 1395 et seq.
(?Medicare Program?).

3 1. Part of the Medicare Program was enacted as part of the Medicare Prescription
Drug, Improvement, and Modernization Act of 2003, Pub. L. No. 108-173, to provide
prescription drug bene?ts for Medicare bene?ciaries. Medicare Part became effective January
1, 2006.

32. All persons enrolled in Medicare Part A or Medicare Part are eligible to enroll
in a prescription drug plan under Part D. HHS, through its component agency, the Center for
Medicare and Medicaid Services contracts with private companies (or ?Part 
sponsors?) to administer prescription drug plans. Such companies are regulated and subsidized
by CMS pursuant to one-year, annually renewable contracts. Part I) sponsors enter into
subcontracts with many pharmacies to provide drugs to the Medicare Part bene?ciaries
enrolled in their plans.

33. Generally, after a Prescriber writes a prescription for a patient who is a Medicare

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bene?ciary, that patient can take the prescription to a pharmacy to be ?lled. When the pharmacy
dispenses drugs to the Medicare bene?ciary, the pharmacy submits a claim electronically to the
bene?ciary?s Part sponsor (sometimes through the sponsor?s pharmacy bene?t manager, or
The pharmacy receives reimbursement from the sponsor (or PBM) for the portion of
the tint aid by the bene?ciary. The Part sponsor is then required to submit to the
CMS an electronic noti?cation of the drug dispensing event, called the Prescription Drug Event
which contains data regarding the prescription claim, including the service provider of
the drug, the prescriber of the drug, the quantity dispensed, the amount paid to the pharmacy, and
Whether the drug is covered under the Medicare Part bene?t.

34. Payments to a Part Plan sponsor are ?conditioned upon the provision of
information to CMS that is necessary? for CMS to administer the Part program and make
payments to the Part Plan sponsor for quali?ed drug coverage. 42 C.F.R. 423.322. 
instructions for the submission of Part prescription PDE claims data state that ?information . . .
necessary to carry out this subpart? includes the data elements of a PDE. PDE records are an
integral part of the process that enables CMS to administer the Part bene?t. Each PDE that is
submitted to CMS is a summary record that documents the ?nal adjudication of a dispensing
event based upon claims received from pharmacies and serves as the request for payment for
each individual prescription submitted to Medicare under the Part program.

35. CMS gives each Part sponsor advance payments consisting of the Part
sponsor?s plan?s direct subsidy per enrollee (which is based on a standardized bid made by the
Part sponsor), estimated reinsurance subsidies for catastrophic coverage, and estimated low
income subsidies. 42 C.F.R. 423.315, 423.329. At the end of the payment year, CMS

reconciles the advance payments paid to each Part sponsor with the actual costs the sponsor

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has incurred. In this reconciliation process, CMS uses the PDE claims data it has received from
the Part sponsor during the prior payment year to calculate the costs the Part sponsor has
actually incurred for prescriptions ?lled by Medicare bene?ciaries under Part D. If CMS
underpaid the sponsor for low-income subsidies or reinsurance costs, it will make up the

usor ior low-income suvsidies or reinsurmce costs, it will
recoup the overpayment from the sponsor. After CMS reconciles a plan?s low-income subsidy
and reinsurance costs, it then determines risk-sharing amounts owed by the plan to CMS or by
CMS to the plan related to the plan?s direct subsidy bid. Risk-sharing amounts involve
calculations based on whether and to what degree a plan?s allowable costs exceeded or fell below
a target amount for the plan by certain threshold percentages. 42 CPR. 423.336.

36. payments to the Part sponsor come from the Medicare Prescription
Drug Account, an account within the Federal Supplementary Medical Insurance Trust Fund. 42
CPR. 

37. To receive Part funds from CMS, Part Plan sponsors, as well as their
authorized agents, employees, and contractors (including pharmacies), are required to comply
with all applicable federal laws, regulations, and CMS instructions.

38. By statute, all contracts between a Part Plan sponsor and the HHS must include
a provision whereby the Plan sponsor agrees to comply with the applicable requirements and
standards of the Part program as well as the terms and conditions of payment governing the
Part program. 42 U.S.C. 

39. Medicare Part Plan sponsors must also certify in their contracts with CMS that

they agree to comply with all federal laws and regulations designed to prevent fraud, waste, and

abuse, including the FCA and AKS. 42 CPR. 

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40. In accordance with these express statutory and regulatory requirements, all
contracts entered into between CMS and Plan Plan sponsors from 2006 through the present
include a provision in which the sponsor ?agrees to comply with . . . Federal laws and regulations

designed to prevent fraud, waste, and abuse, including, but not limited to, applicable provisions

'rns Act (31 use. 3729915en) a Anti~Kickback

.. 4.). - 

Statute (section 1128B(b) of the Act).? 42 C.F.R. 

41. CMS regulations further require that all subcontracts between Part Plan
sponsors and entities (such as pharmacies and PBMS) contain language obligating
the entities in question to comply with all applicable federal laws, regulations, and CMS
instructions. 42 C.F.R. 

42. A Part Plan sponsor also is required to certify to the accuracy, completeness
and truthfulness of the PDE claims data submitted to CMS. Speci?cally, the relevant regulatory
provision, entitled ?Certi?cation of data that determine payment,? provides in relevant part:

(1) General rule. As a condition for receiving a payment under
subpart of this part (or for fallback entities, payment under subpart of
this part), the Part plan sponsor agrees that its chief executive of?cer
(CEO), chief ?nancial of?cer (CFO), or an individual delegated the
authority to sign on behalf of one of these of?cers, and who reports
directly to the of?cer, must request payment under the contract on a
document that certi?es (based on best knowledge, information, and belief)
the accuracy, completeness, and truthfulness of all data related to
payment. The data may include speci?ed enrollment information, claims
data, bid submission data, and other data that CMS speci?es.

(2) Certi?cation of enrollment and payment information. The CEO, CFO,
or an individual delegated the authority to Sign on behalf of one of these
of?cers, and who reports directly to the of?cer, must certify (based on best
knowledge, information, and belief) that each enrollee for whom the
organization is requesting payment is validly enrolled in a program offered
by the organization and the information CMS relies on in determining
payment is accurate, complete, and truthful and acknowledge that this
information will be used for the purposes of obtaining Federal
reimbursement.

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(3) Certi?cation of claims data. The CEO, CFO, or an individual
delegated with the authority to sign on behalf of one of these of?cers, and
who reports directly to the of?cer, must certify (based on best knowledge,
information, and belief) that the claims data it submits under 
(or for fallback entities, under are accurate,
complete, and truthful and acknowledge that the claims data will be used
for the purpose of obtaining Federal reimbursement.

43. Compliance with the regulatory requirement that the PDE data submitted to CMS
be true, accurate, and complete is a condition of payment under the Medicare Part program.
See id. at 

44. In accordance with this regulatory requirement, since the Part program began,
Medicare required each Part Plan sponsor to sign annually an Attestation of Data Relating to
CMS Payment to a Medicare Part Sponsor (?Attestation?). This Attestation states:

Pursuant to the contract(s) between the Centers for Medicare Medicaid
Services (CMS) and the Medicare Part Organization(s) listed above,
hereafter referred to as the Part Organization, governing the operation of
the contract numbers listed above, the Part Organization hereby makes
the following attestations concerning CMS payments to the Part 
Organization:

The Part Organization attests that based on its best knowledge,
information, and belief, the ?nal Prescription Drug Event (PDE) data that
have been submitted to and accepted by CMS as of [date] with respect to
the Part plans offered under the above-stated contract(s) for the dates of
service of January 1, [prior year] to December 31, [prior year], are
accurate, complete, and truthful and re?ect all retroactive adjustments of
which the Part organization has been informed by May 30, [current
year]. In addition, the Part Organization attests that based on best
knowledge, information, and belief, the payments that have been made by
the Part organization for the claims summarized by the aforementioned
PDE data were made in accordance with the coordination of bene?ts
guidance in Chapter 14 of the Medicare Prescription Drug Bene?t Manual
and other applicable CMS guidance. The Part Organization attests that
based on its best knowledge, information, and belief as of the date(s) of
last successful DIR [Direct and Indirect Remuneration Data] [prior year]
data submission(s) via the Health Plan Management System (HPMS) as
listed above, the ?nal direct and indirect remuneration data submitted to

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CMS for the Part plans offered under the above-stated contract(s) for
the [prior] coverage year are accurate, complete, and truthful and fully
conform to the requirements in the Medicare Part program regulations
and the Final Medicare Part DIR Reporting Requirements for [the prior
year]. The Part Organization also certi?es that based on its best
knowledge, information, and belief as of the date indicated below, all
other required information provided to CMS to support the determination
of allowable reinsurance and risk corridor costs for the Part plans
offered under the above-stated contract{s) is accurate, complete, and
truthful. With regards to the information described in the above
paragraphs, the Part Organization attests that it has required all entities,
contractors, or subcontractors, which have generated or submitted said
information (PDE and DIR data) on the Part Organization?s behalf, to
certify that this information is accurate, complete, and truthful based on its
best knowledge, information, and belief. In addition, the Part 
Organization attests that it will maintain records and documentation
supporting said information. The Part Organization acknowledges that
the information described in the above paragraphs will be used for the
purposes of obtaining federal reimbursement and that misrepresentations
or omissions in information provided to CMS may result in Federal civil
action and/or criminal prosecution.

45. All approved Part Plan sponsors who received payment under Medicare Part 
in bene?t years 2006 through the present date submitted these required Attestations in the same
or similar format.

46. Medicare regulations further provide: ?If the claims data are generated by a
related entity, contractor, or subcontractor of a Part plan sponsor, the entity, contractor, or
subcontractor must similarly certify (based on best knowledge, information, and belief) the
accuracy, completeness, and truthfulness of the data and acknowledge that the claims data will
be used for the purposes of obtaining Federal reimbursement.? 42 CPR. 

47. Medicare also enters into agreements with physicians to establish the physician?s
eligibility to participate in the Medicare program. To be eligible for participation in the
Medicare program, physicians must certify that they agree to comply with the Anti-Kickback

Statute, among other federal health care laws. Specifically, on the Medicare enrollment form,

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CMS Form 8551, the ?Certi?cation Statement? that the medical provider signs states: ?You
MUST sign and date the certi?cation statement below in order to be enrolled in the Medicare
program. In doing so, you are attesting to meeting and maintaining the Medicare requirements

stated below.? Those requirements include:

1' - pin-,1? 1m 
1 agree to duruc uy tire Medicare laws, regulations and program

instructions that apply to me . . . . The Medicare laws, regulations and
program instructions are available through the fee?for-service contractor. I
understand that payment of a claim by Medicare is conditioned upon the
claim and the underlying transaction complying with such laws,
regulations, and program instructions (including, but not limited to, the
Federal anti~kickback statute and the Stark law), and on the supplier?s
compliance with all applicable conditions of participation in Medicare.

I will not knowingly present or cause to be presented a false or fraudulent
claim for payment by Medicare, and will not submit claims with deliberate
ignorance or reckless disregard of their truth or falsity.

Medicaid

48. Medicaid is a?joint federal-state program created in 1965 that provides health care
bene?ts for certain groups, primarily the poor and disabled. Each state administers a State
Medicaid program.

49. The federal Medicaid statute requires each participating state to implement a plan
containing certain speci?ed minimum criteria for coverage and payment of claims. 42 U.S.C. 
1396, 1396a(a)(l3), l396a(a)(30)(A). While drug coverage is an optional bene?t, the Medicaid
programs of all states provide reimbursement for prescription drugs.

50. The federal portion of each state?s Medicaid payments, known as the Federal
Medical Assistance Percentage is based on the state?s per capita income compared to
the national average. 42 U.S.C. l396d(b). Federal funding under Medicaid is provided only
when there is a corresponding state expenditure for a covered Medicaid service to a Medicaid

recipient. The federal government pays to the state the statutorily established share of the ?total

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amount expended . . . as medical assistance under the State plan.? 42 U.S.C. 1396b(a)(l).
51. The vast majority of states award contracts to private companies to evaluate and
process claims for payment on behalf of Medicaid recipients. Typically, after processing the

claims, these private companies generate funding requests to the state Medicaid programs.

1 arter, each . tate submits 52.
estimate of its Medicaid federal funding needs for the quarter. CMS reviews and adjusts the
quarterly estimate as necessary, and determines the amount of federal ?inding each state will be
permitted to draw down as it incurs expenditures during the quarter. The state then draws down
federal funding as actual provider claims, including claims from pharmacies seeking payment for
drugs, are presented for payment. After the end of each quarter, the state submits to CMS a ?nal
expenditure report, which provides the basis for adjustment to the quarterly federal funding
amount (to reconcile the estimated expenditures to actual expenditures). 42 CPR. 430.30.

5 3. Claims arising from illegal kickbacks are not authorized to be paid under state
regulatory regimes. In fact, providers who participate in the Medicaid program must sign
enrollment agreements with their states that certify compliance with the state and federal
Medicaid requirements, including the AKS. Although there are variations among the states, the
agreement typically requires the prospective Medicaid provider to agree that he or she will
comply with all state and federal laws and Medicaid regulations in billing the state Medicaid
program for services or supplies furnished.

54. Furthermore, in many states, Medicaid providers, including both physicians and
pharmacies, must af?rmatively certify compliance with applicable federal and state laws and

regulations.

55. For example, in New York, physicians and pharmacies must periodically sign a

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?Certi?cation Statement for Provider Billing Medicaid,? in which the provider certi?es that
claims submitted ?to the State?s Medicaid ?scal agent, for services or supplies furnished, . 
will be subject to the following certi?cation . . . . I (or the entity) have furnished or caused to be

furnished the care, services, and supplies itemized and done so in accordance with applicable

TRICARE

5 6. TRICARE is part of the United States military?s health care system, designed to
maintain the health of active duty service personnel, provide health care during military
operations, and offer health care to non-active duty bene?ciaries, including dependents of active
duty personnel, and military retirees and their dependents. The military health system, which is
administered by the Department of Defense is composed of the direct care system,
consisting of military hospitals and military clinics, and the bene?t program, known as
TRICARE. TRICARE is a triple?option bene?t program designed to give bene?ciaries a choice
between health maintenance organizations, preferred provider organizations, and fee?for-service
bene?ts.

57. TRICARE prescription drug bene?ts are provided through three different
programs: military treatment facility outpatient pharmacies, TRICARE network retail
pharmacies, and mail order service. TRICARE contracts with a PBM to administer
its retail and mail order pharmacy programs. In addition, TRICARE bene?ciaries can also pay
out-of-pocket to ?ll prescriptions at non-network retail pharmacies, and submit a claim for
reimbursement directly with PBM. The claims process is different for each of these

pharmaceutical programs.

58. When a TRICARE bene?ciary brings a prescription to a TRICARE network retail

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pharmacy, for example, the pharmacy submits an electronic claim to the FEM for that
prescription event. The PBM sends an electronic response to the pharmacy that con?rms the
beneficiary?s TRICARE coverage, and, if the prescription claim is granted, informs the

pharmacy of the calculated pharmacy reimbursement amount and the co-pay (if applicable) to be





p-


C)

1-1111 M: am A 
11u1 1 L11: u? 13116111136 

bene?ciary and dispenses the medication. After a 10-day hold to ensure the prescription was
picked up and not returned to the shelf by the pharmacy, the FEM sends a TRICARE Encounter
Data record electronically to TRICARE. The TED record includes information
regarding the prescription event, including the reimbursement amount to be paid to the
dispensing pharmacy. TRICARE then authorizes the PBM to make payment to the pharmacy for
the amount remaining (after co-pay) on the claim. The PBM sends the payment to the pharmacy.
After the payment is made by the bank, the bank requests reimbursement from
the Federal Reserve Bank The FRB then transfers funds to the bank account.
59. If the prescription is ?lled at a non?network retail pharmacy, the beneficiary must
pay the full price of the prescription to the pharmacist and ?le a claim for reimbursement on DD
Form 2642, Medical Claim- Patient?s Request for Medical
Payment (?Form 2642?). The Form 2642 is mailed to the PBM. As in the case of
reimbursements under the retail pharmacy program, a TED record is created and sent to
TRICARE. TRICARE then authorizes payment to the TRICARE bene?ciary. Upon receiving
that authorization, the FEM issues a check to the bene?ciary, which is drawn on the bank
account. TRICARE then reimburses the FEM in the same manner as it does under the retail
pharmacy program, such that funds are transferred from the FRB to the bank account.

60. TRICARE bene?ciaries can also ?ll prescriptions through mail order

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pharmacy program. TRICARE bene?ciaries submit prescriptions by mail, fax, or electronically
to PBM, along with any co-pay (if applicable). PBM delivers the
prescription to the bene?ciary via free standard shipping. The medications dispensed through

the mail order pharmacy program are ?lled from the existing inventory of

-. PBM tb . harmacen icals rom national
prime vendor contracted by the Defense Logistics Agency DOD procures the
pharmaceuticals through its national prime vendor and replenishes the inventory of
pharmaceuticals. The PBM then submits a TED record to TRICARE to obtain administrative
fees. DLA bills TRICARE directly for drug replenishment costs.

61. Pursuant to 38 U.S.C. 8126, pharmaceutical manufacturers are required to enter
into national contracts with the DOD pursuant to which the manufacturer makes available for
procurement certain covered drugs at the Federal Ceiling Price (a price that is calculated as at
least 24% less than the manufacturer?s average price based on all sales to commercial customers
through a Wholesaler or distributor). Pursuant to contract with its national prime vendor,
the national prime vendor submits an invoice to the DOD for payment of pharmaceuticals
supplied to the FEM in connection with the mail order pharmacy program, charging the DOD the
price set by the contract awarded by the DOD to the drug manufacturer.

62. Since March 2003, TRICARE has contracted with a pharmacy bene?ts manager,
Express Scripts, Inc. to administer mail order pharmacy programs. ESI has
also administered retail pharmacy program since June 2004.

63. Similarly, military treatment facilities purchase medications through

procurement contracts with third party pharmaceutical prime vendors. When a TRICARE

bene?ciary submits an outpatient prescription to a military treatment facility?s outpatient

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pharmacy, the pharmacy purchases the medication from the prime vendor pursuant to an existing
procurement contract, and the drug is then dispensed to the patient.

64. While some physicians enroll in the TRICARE program as network or
participating providers, any physician that is licensed, accredited and meets other standards of

. .
4-1. mm11n1+ 1 11+

L116 medical community is autuo to provide services to TRICAWE benenciaries. Physicians
who are enrolled in the TRICARE network must expressly certify their compliance with
regulations. Yet all providers that provide services to TRICARE bene?ciaries,
whether network providers or non?participating providers, are required to comply with
program requirements, including its anti-abuse provisions. 32 CPR. 
TRICARE regulations provide that claims submitted in violation of anti-abuse
provisions can be denied. Id. Kickback arrangements are included within the

de?nition of abusive situations that constitute program fraud. Id. 

Veterans Administration Health Care

65. The Department of Veteran Affairs maintains a system of medical
facilities from which all pharmaceutical supplies, including prescription drugs, are procured
directly by the VA. A VA bene?ciary can take a prescription to a VA medical facility, at which
point the VA dispenses the medication to the VA bene?ciary from its existing inventory. The
VA also supports a mail service prescription program as part of its outpatient drug bene?t. VA
bene?ciaries can submit prescriptions to that mail service program, and the VA then dispenses
pharmaceuticals purchased by the VA directly to VA bene?ciaries. The VA medical system
serves approximately four million veterans.

66. The VA purchases the pharmaceuticals that it dispenses at its medical facilities

and through its mail service prescription program through its Federal Supply Schedule 

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program. Pursuant to Public Law 102-585, pharmaceutical manufacturers are required to enter
into national contracts with the VA pursuant to which the manufacturer makes available for
procurement certain covered drugs at the Federal Ceiling Price. A VA facility that requires a

supply of a particular medication (including a mail order facility) submits a purchase order to the

67. Pursuant to the PPACA, among other things, all claims to Government
reimbursed programs resulting from a violation of the AKS are also a violation of the FCA.

68. Moreover, the statutes and regulations set forth above concerning Medicare,
Medicaid, TRICARE, and Veterans Administration Health Care, when viewed together, state
that healthcare providers must comply with the AKS in order for claims they cause to be
submitted to these programs to be reimbursed.

69. Here, the claims submitted for the Covered Products violated the AKS because
they stemmed from prescriptions that were tainted by kickbacks, while the participants in the
scheme knew that claims for reimbursement would be submitted to the above programs. As
such, and as more fully discussed below, the prescribing healthcare providers expressly and
impliedly falsely certi?ed compliance with the conditions of payment for, at least, Medicare,
Medicaid, TRICARE, and Veterans Administration Health Care.

70. In addition to falsely certifying compliance with the AKS, the healthcare
providers also falsely certi?ed compliance with contractual provisions that were conditions for
payment.

INVESTIGATION

71. To unmask Defendants? unlawful conduct, Relator and its representatives

interviewed numerous individuals with knowledge of the scheme.

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0 Con?dential Interviewee #1 was employed by Lash as a nurse educator
for Betaseron from 2007 until March of 2014. Her territory was southeast

Virginia, central and eastern North Carolina, and northeast South Carolina.

0 Con?dential Interviewee #2 was employed by Amerisource as a nurse
educator for Betaseron from 2002 until October of 2015 Her territory included
the State of Minnesota.

0 Con?dential Interviewee #3 was a drug rep for Bayer from December
2012 until July of 2014. Her territory was Buffalo, New York and the
surrounding area.

0 Con?dential Interviewee #4 was employed by Lash as a reimbursement

support services representative for Betaseron from October 2012 until March of
2015. Her territory included the northeast part of the United States.

0 Con?dential Interviewee #5 was employed by Lash as a nurse educator
for Nexavar from 2013 until 2015. Her territory was the State of New Jersey.

0 Con?dential Interviewee #6 was employed by Bayer as a Nexavar drug
rep from 2005 until 2013. His territory was the State of Illinois.

0 Con?dential Interviewee #7 was employed by Lash as a reimbursement
support services representative from September 2013 until February 2014. Her
territory included various parts of the United States.

THE FRAUDULENT SCHEMES
72. Based on Relator?s investigation, there is overwhelming evidence that Bayer and
Amgen, with substantial assistance from Amerisource and Lash engaged in a complex, multi-part

scheme that involved the payment of kickbacks to Prescribers for the purpose of increasing

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prescriptions for the Covered Products.
73. In the ?rst scheme, with assistance from Amerisource and Lash, Bayer and

Amgen provided free nurse services to Prescribers to induce them to recommend the Covered

Products to their patientsscrim it: 

74.
Amerisource and Lash to deploy nurse educators to recommend the Covered Products to
Prescribers and patients, thereby blurring the lines between independent medical advice and
sales.

75. In the third scheme, with assistance from Lash, Bayer and Amgen provided in-
kind remuneration in the form of reimbursement support services, saving Prescribers thousands
of dollars in administrative expenses, to induce Prescribers to recommend the Covered Products.

Scheme One: Free Nurse Services

76. In its ?rst scheme, Bayer and Amgen offered free nurse education and patient
management services to induce Prescribers to recommend the Covered Products over competitor
products. Bayer and Amgen provided these services through Amerisource and Lash nurses.

77. Most Prescribers typically allocate between 10 to 15 minutes to see routine
patients. However, patients suffering from MS and cancer often require extra of?ce time,
training, and resources to manage their disease. For this purpose, to treat MS and cancer
patients, Prescribers frequently rely on certi?ed nurse educators. The cost associated with the
use of nurse educators, however, is signi?cant a nurse educator often commands an annual
salary that exceeds $60,000, or an average hourly wage of $40.00 per hour.

78. Seeking to exploit the needs of Prescribers and healthcare organizations and the

challenges they face in managing patients affected by chronic diseases, Bayer and Amgen

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developed a marketing strategy that involved furnishing nurse educators to Prescribers to induce
them to prescribe the Covered Products. As CI-2 explained, ?When it was discovered that
patients needed so much more than what they were getting, a golden opportunity appeared.?

79. Bayer?s MS nurse educator program is called ?Beta Plus? (as in ?Betaseron?), and
the rurse educ nd Amgen?s nurse educator
program for Nexavar is called ?Nex Connect? and the nurse educators are sometimes referred to
as ?Clinical Support Specialists.? Beta Plus has been around for at least the last decade and had
roughly 120 nurse educators at its peak. The Beta Plus program ended in 2015. The Nexavar
nurse educator program began at least as far back as 2009. According to CI-S, a Nexavar nurse
educator, Beta Nurses were simply moved from the Beta Plus program to Nex Connect when the
Beta program ended. The Nexavar program includes roughly 28 nurse educators. Both of these
programs were/are available to patients across the United States.

80. Bayer and Amgen?s nurse educator patient trainings were one-on-one sessions
between a nurse educator and a Prescriber?s patient. The trainings were usually in the patient?s
home and the length of the training varied between 40 minutes and an hour and a half. Patients
could receive in-person training multiple times, depending on the patient?s needs. Patients
received telephonic follow-ups from nurse educators at scheduled intervals; for example, at two
weeks, one month, two months, etc. In general, Betaseron patients received one in-person
training from a nurse educator, while Nexavar patients were trained in?person twice.

81. Patient training sessions included training regarding disease state, answering
patient questions, assisting with insurance coverage, and teaching on how to administer the
Covered Products.

82. Prescribers were encouraged to enroll all patients using the Covered Products into

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these patient support programs so that the nurse educators could begin to directly manage these
patients and free the Prescriber from the time and expense of doing so.

83. Bayer and Amgen drug reps and nurse educators were trained to encourage
Prescribers to off-load their patients to the nurse educators for management. a Beta Nurse,
expiained:

[W]hen we [nurse educators] come in, of course we try to convince [Prescribers]

that we are well-trained in Betaseron and even though their nurses are very

capable, this is something that we do on a daily basis and we talk about every part

of our [patient] training. In most cases they?ll go, ?Well, we [Prescribers] don?t

have the time to be able to do that for our patients.? And a lot of times they?ll talk

to the sales people that they?re prescribing speci?cally to get a Beta nurse in the

house.

84. CI-2, also a Beta Nurse, offered her nurse educator services by saying ?consider
me being the eyes and ears of your clinic, but in [the patient?s] home. So I can give you
[Prescribers] information and feedback and observations that you can?t make because you only
see them when they come in and they only share as much as they want to share with you. When
I meet with them, in their homes, I get more information, even if it?s just by observation.? CI-2

further explained that she persuaded Prescribers by saying, ?Give me one patient. Let me prove

to you that I can make a difference, and if that works, if that made a difference, then we?ll go

from there.?
85. a Nexavar nurse educator, explained how she approached Prescribers:
The general oncology practice, . . . [is] extremely busy. They see hundreds of

patients a day . . . [so] very often one of the complaints that patients had, which is
what a lot of providers would come and tell me is that, the nurses and staff did not
have suf?cient amount of time to spend with the patient, explaining the titration
of dosing, side effects, what to do if this happens, what to do if that happens. So,
one of the ways that I approached the practitioners to utilize those services was:
understand you have these newly diagnosed patients that you wish you could
spend hours with getting them comfortable and moving them through this
process,? and . . . they don?t have that. So that?s where I can come in, I am a

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trained oncology nurse and I can then go to the patient?s home where they?re
comfortable, and their family around me, and spend as much time as that patient
need[s]. Then they will have direct access to me after that.

86. The nurse educator programs provide a valuable, tangible, bene?t to Prescribers.

Cl-l, a Beta Nurse, stated that her role was ?like another nurse for the doctor . . . we were part of

?r 
. eam, Where doctors

115/ 

.onld call is and we could call tue doc
was very interactive with the Prescriber; nurse educators and Prescribers would collaborate when
treating patients.

87. Cl-2, another Beta Nurse explained the bene?t to Prescribers in the following
way:

Well, going back to that ?give me one patient. Let me prove to you that I can

make a difference,? . . . [Prescribers] gave [nurse educators] their most dif?cult

patient. The one that?s always calling them. The one that always has questions
about side effects. The one that wants to come in and be seen all the time. If you

can get that patient and help manage that patient, it saves [Prescribers] from

getting phone calls from the patient, returning phone calls for that patient, guiding

the patient on how to manage their side effects, or needing to come in excessively.

So it saves of?ce time. It saves them consequently then, money because they?re

not spending time reassuring and reiterating the message that they?ve already told

this patient who just is needy and either isn?t remembering it or just has excessive

needs. You help manage those patients so that the office doesn?t have to.

88. Both Cl?l and (31-2 also explained that part of their role was to help patients
overcome ?needle phobia,? as Betaseron is a self-injectable medication. Further, CI-3, an MS
drug rep, also believed that the Betaseron nurse educator services were a tangible bene?t to
Prescribers. The bene?t to Prescribers can also be seen by the sheer number of Prescribers who
utilized or are utilizing nurse educator services. CI-3 estimated that 95% of Prescribers who

prescribed Betaseron also utilized the nurse educator services.

89. CI-S, a Nexavar nurse educator, explained the bene?t to Prescribers by noting

that:

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[T]here were a couple of of?ces that had such a great number of patients that
usually . . . would do the initial training very quickly right there in the of?ce at
the time of the visit. And then, if that patient needed additional training, . . .
[Prescribers] just kept a list and at the end of the week they would send me the list
and say, ?[Y]ou may want to just touch base with each of them [patients].? . . .
[T]hat would save [Prescribers] time and money . . . . They would tell the patient,
?You?re going to get a call from the Nexavar nurse. She is going to make sure
you?re feeling okay and go over everything. If you needed this training or help or

+L:n:n 
iouuw up, uus lb uer number you can eali her.

further stated that ?when [Prescribers are] familiar with the fact that [Bayer and
Amgen] have this great nursing service that will walk the patients and hold their hands through
the process, where they can . . . write the script [and] take a step back . . . instead of [dealing
with] the patient calling continuously with questions of confusion, that?s a big positive for many
of?ces.?

90. CI-6, a Nexavar drug rep, ?agree[d]? that nurse educator services were a tangible
bene?t to Prescribers. In particular, he stated:

[Nurse educators] [k]eep the patients in the loop completely. Sometimes in

of?ces, the physician has other patients, of course, and there is not a real close

relationship outside of the regular appointment. But the patient sometimes needs
someone that they feel a little bit more comfortable talking to as far as side effects

[and] how to take [the Covered Products]. Those discussions are really important

to staying on therapy. So I think the nurse educator plays a really big role as far

as helping the nurse give the information to the patient and that?s the most

important thing to really make sure that the patient is comfortable taking a
particular pharmaceutical product.

CI-6 also estimated that 60% of Prescribers who prescribed Nexavar utilized the nurse
educator services.

91. In sum, in return for prescribing the Covered Products to patients, Prescribers
reduced the time and cost required to treat those patients, freed up time to see other patients, and
increased pro?tability. The nurse educators are effectively free employees given to Prescribers

in exchange for the Prescribers? commitment to recommend the Covered Products over

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competing products. Bayer and Amgen, with the assistance of Lash and Amerisource, enabled
Prescribers to ?eliminate an expense that [they] would have otherwise incurred?7 if they directly
employed the nurse educators or provided the services themselves. Bayer and Amgen?s ?Free
Nurse? marketing scheme thus violates the AKS.

(V 
1

- ?cheme we: ?v?v?hite Coat Marketing by Nurse Educators

92. Since at least 2006, with assistance from Amerisource and Lash, Bayer and
Amgen have relied on nurse educators to help promote the Covered Products, obtain better
access to Prescribers, and in?uence Prescribers to prescribe the Covered Products.

93. Prescribers often restrict or deny access to drug reps, but tend to be more willing
to meet with healthcare professionals. Accordingly, Bayer and Amgen resorted to nurse
educators to gain access to Prescribers and promote the Covered Products.

94. Bayer and Amgen?s relationship with Amerisource and Lash plainly involves the
payment of kickbacks cash consideration in return for services that led to prescriptions being
?lled and paid for with Government money.

95. In this case, Bayer and Arngen paid remuneration to nurse educators to
recommend the Covered Products over competing products to Prescribers and patients. The
nurses were likely to be viewed by Prescribers as better credentialed and more credible than

traditional drug reps, and, thus, they were more likely to gain access to Prescribers and their

staff.

 

7 01G Compliance Program Guidance for Pharmaceutical Manufacturers, Dep?t of Health
Human Servs., 68 Fed. Reg. 23731-01, 23737 (May 5, 2003),
(if ?services
provided by the manufacturer eliminate an expense that the physician would have otherwise
incurred (119., have independent value to the physician) . . . the arrangement may be problematic
if the arrangement is tied directly or indirectly to the generation of federal health care program
business for the manufacturer?).

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96. The Office of Inspector General refers to the practice of utilizing
healthcare providers, like nurses, to promote particular drugs as ?white coat marketing,? and has
warned against the practice.

The fraud and abuse risks are compounded where . . . a physician or other health
care professional is involved in the marketing activity?ma practice sometimes

A 1: want". 
to as wuitc coat marketing. White coat marketing is closely scrutinized

under the anti-kickback statute because physicians and other health care

professionals are in an exceptional position of public trust and thus may exert

undue in?uence when recommending health care?related items or services . . . .8

97. Bayer and Amgen paid Amerisource and Lash to hire nurse educators to
recommend the Covered Products to Prescribers and patients and drive sales.

98. Bayer, Amgen, Amerisource, and Lash needed a clever approach to disguise this
marketing strategy. After all, the nurses could not openly play the role of drug reps for at least
three reasons. First, Prescribers would potentially limit nurse access, in the same manner that
drug rep access was being limited. Second, if Prescribers knew that the nurses were nothing
more than sales reps in disguise, Prescribers would discount the nurses? ?recommendations? as
biased. Third, the 01G has identi?ed white coat marketing as particularly suspect and the AKS
prohibits pharmaceutical companies from paying non-employees to ?recommend? its drugs to
others.9 Since the nurses involved in this scheme were not Bayer or Amgen employees, Bayer,
Amgen, Amerisource, and Lash could not openly pay the nurses to exclusively recommend the
Covered Products.

99. In an attempt to circumvent the law, Bayer and Amgen contrived a disease

awareness program that would act as a cover for the nurses, seemingly distinguishing them from

 

8 See, eg, ore Op. 11-08, at 6 (Jun. 14, 2011),
oi g.hhs. gov/ fraud/ docs/advisoryopinions/ZO l/Adepnl 1-O8.pdf.

9 42 use. 

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drug reps and enabling them to appear to be independent. Bayer, Amgen, Amerisource, and
Lash designated the nurses as ?educators? who, instead of being paid to recommend drugs, were
purportedly there to promote free educational services to Prescribers.

100. Although the nurses were independent contractors and were purportedly

the Covered Products. This conclusion

is compelled by numerous facts Relator uncovered during its investigation.

101. Buyer and Amgen provided sales training to the nurse educators. Bayer and
Amgen invested heavily in training nurse educators how to gain access to Prescribers and
promote the Covered Products. This training was a vital component of Bayer and Amgen?s
scheme because Bayer and Amgen?s ultimate goal was to drive drug sales.

102. explained that she was trained on what to say to Prescribers because ?we
were able to actually make visits without the sales [rep] and that?s why it was more important for
us to know the correct things to say.? Cl-l would often report back to the Prescriber after a
patient?s training, so she was taught how to use that interaction to promote Betaseron. She noted
that she ?could not compare other medications, but we could talk about all the benefits and the
things that we saw that the patients were able to bene?t from the drug [Betaseron].? Further, CI-
1 explained that she was trained on how to deal with doctors who are ?really anti-Betaseron or
injections.? Similarly, a Beta Nurse, indicated that she was trained on how to overcome
Prescriber and staff objections.

103. Another way that nurse educators were trained was through role-playing
exercises. For example, CI-S, a Nexavar nurse educator, stated that the role-plays ?with health
care providers it was more or less, ensuring that their patients were receiving the best care and

[learning] what services should be provided [by the nurse educator].? She noted that when she

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was going to visit Prescribers with the drug reps, the drug rep ?would take on the selling . . . all
of the PI information, statistics, indication, and I would come in with the clinical side effects,
patients, training, and everything else that went along with that.?

104. The nurse educators were actively used by Buyer and Amgen to drive sales.

ioyed nurse educa ors to ta get Rescribers and

-.

?nce trained, Buyer ant 
facilities with high potential to prescribe the Covered Products. To maximize the chances of
success, the nurse educators coordinated with Bayer and Amgen drug reps and would often
accompany the drug reps on sales calls.

105 . CI- 1 a Beta Nurse, stated that the drug rep and herself ?usually plan a month
ahead on the different of?ces we?re going to go visit.? The drug rep ?would actually meet with
me and say, ?We?re going to see these particular doctors.? indicated that they decided
which doctors to visit by ?basically target[ing] the higher prescribing ones. Just because we
wanted to continue to stay on top of them and because we were seeing so many of their patients.?
further stated: ?I?d look at my database to see what patient I?d recently trained or did
follow up calls with and we [drug rep and nurse educator] would prep before we went to see each
doctor.?

106. CI-2, a Beta Nurse, explained that she would target providers based on the
number of referrals she got: ?clearly, if you?ve got one clinic who?s giving you five referrals a
week, they?re an important case and they?re an important provider and they?re going to be
somebody you want to have a lot of communication with and pay attention to.? indicated
that targeting was also ?based on a history of what [the Prescriber?s] referral pattern was already
and a history of need. For instance, some clinics had their own educators in the clinic . . . [a]nd

some didn?t. And you would know what that was. You would know which clinics were a no-see

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3

clinic . . . 
107. Nurse educators gained access to Prescribers. Once trained, nurse educators
immediately began to gain access and in?ltrate Prescriber of?ces and facilities. For example,

a Beta Nurse, explained ?It was such a big plus for the sales rep to be able to travel with a

+L?r?un nn
an cu us uut LLICLC no 80011 as [30831

further indicated that she

would go to a lot of conferences or meetings and if I bumped into a doctor in my

territory that I never met, I would basically go up and introduce myself . . . . I

would say, travel with my rep in DC. and we haven?t been able to actually visit

your of?ce. When can we actually set up an appointment to come in as a team??

And oftentimes they?ll say, ?Oh! Check in with my staff.? They?d give you a

speci?c name and somehow we?d get an in and say, ?My nurse met your doctor

and he said to go ahead and set up an appointment.?

108. Given their training, education, and experience, nurse educators were able to gain
access to potential Prescribers in some circumstances where drug reps could not. CI-2, a Beta
Nurse, said, ?Even though we?d go to clinics together [with a drug rep], we would then separate
off and I would speak to healthcare providers separately . . . 

109. CI-3, a Betaseron drug rep, explained how nurse educators? post-patient training
reports to the Prescriber helped gain access ?because the nurse educators may have information
that is speci?c to a patient . . . . so then you could discuss more speci?cs related to [the
Prescriber? 3 patients] 

110. In experience, ?very often now . . . doctor?s of?ces have posted right on
their doors ?we will not see drug reps? . . . . often, I can get my foot in the door . . . . I?ve
worked with many of the nurses in my area . . . and the doctors and sometimes it?s just [that the

Prescribers] like dealing with another health care practitioner instead of somebody that they feel

[is] trying to sell them something . . . 

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111. Cl-6, a Nexavar drug rep, agreed. ?It?s getting more dif?cult now to get in to the
oncology of?ces primarily because of the Sunshine Act . . . depending on the individual practice.
So any time you can have access from a nursing point of View that really helps you with . . .
promoting your product in that particular practice.?

112. 1e nurse educate-rs were tasked with promoting 


N:

:3

Products. The real mission of the nurse educators was to increase prescriptions of Bayer and
Amgen Covered Products.

113. The nurse educators generally did not discuss competitors. Cl-l, a Beta Nurse,
stated, ?we aren?t allowed to talk about competitor drugs.? Cl-2, a Beta Nurse, explained that,
?It?s not that you can?t say the other company?s names, drugs, therapies, whatever, but you can?t
discuss it at all.? CI-S, a Nexavar nurse educator, also explained that she was not allowed to
discuss other treatment options: only allowed to talk about our particular drug. We
don?t really get into other therapies.?

114. This situation highlights the promotional aspect of the nurses? ?education.? A
true nurse educator?s role would inherently include a discussion of the many treatment options
for MS or cancer. However, these nurse educators focused on the bene?ts of the Covered
Products.

115. a Beta Nurse, explained how she focused on patient experiences during
post-patient training reports to the Prescriber when promoting Betaseron.

[T]he pharmaceutical rep, they only can talk about the drug itself . . . . [T]hey?re

not able to talk ?rst-hand . . . . We [nurse educators] just have such a different

relationship with the physicians. So, when we?re talking about the data or we?re

talking about patient experiences, for some reason, they seem to listen to our story

a little bit differently because we?re actually speaking ?rst hand as to what our
patients [on Betaseron] are experiencing or how the disease has developed with

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certain patients . . . . [l]t?s like we have a different message because we?re
bringing speci?c patient information.

116. CI-2, a Beta Nurse, explained how she promoted her services and the Covered
Products: ?You were there to help educate. To get them [Prescribers] to understand why, using
you as an educator and consequently then, that product [Betaseron], was now going to be helpful
for the patient.?

117. CI-5, a Nexavar nurse educator, ?strongly agree[d]? that a nurse educator working
for a pharmaceutical company will promote that company?s drug as the medication of choice.
She said ?If I sign on to support the drug, I?ve done my research and I truly feel that it?s
bene?cial so I have no problem supporting that drug and only that drug in comparison to the
others that [are] on the market.?

118. CI-6, a Nexavar drug rep, similarly explained how nurse educators help promote
Nexavar.

[Nurse educators] de?nitely have a part as far as educating, especially [educating]

the nurse practitioners because the nurse practitioners can actually prescribe and

they have a lot of influence with the oncologists. So by having the [nurse

educators] come in and talk about Nexavar and side-effect management, [this]

gives [nurse practitioners] a bit more education about Nexavar and increase[s] the

comfort level as far as recommending it for a particular patient.

119. The nurse educators engaged in direct marketing to patients. Amerisource and
Lash nurse educators also promoted the Covered Products directly to MS and cancer patients.

As with the Prescribers, by purporting to educate patients, White coated nurse educators would be
in a prime position to recommend and promote the Covered Products directly to these patients.

120. Importantly, these encounters were direct nurse?to-paticnt contacts that, in

general, took place at lunch or dinner programs and health fairs. These patient education

sessions could be used to actively convert patients from their current medications to the Covered

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Products.
121. CI-2, a Beta Nurse, explained her experience, stating:
That was our strong suit educating patients about our treatment option . . . .
[W]e didn?t cover others, just our own. We frequently saw patients who were,

what we called, therapy?naive, meaning they haven?t been on any of the
medication[s], or who had been on multiple medications and felt sometimes there

was re-leaming to be done or trying to get rid of information from the past that

maybe wasn?t as clear or effective for them. That was one of our strongest points

in our whole position . . . . We would do things like, meet at health fairs, at the

booths. Then people would come by and want to ask questions and they?d do

comparisons between your treatment option and someone else?s treatment option

and sometimes the difference was just in how educated you were on the

information. Sometimes that alone was what helped them make their decision.

122. a Beta Nurse, explained that programs occurred about once per month. She
gave an example of the type of messaging that took place at these functions and said, ?we spent a
lot of time talking about the easy-towuse, steel-reinforced injectors . . . did not, however,
discuss Betaseron. Yet, the patients ?knew that we were representing Beta Nurses and the
Betaseron product . . . . [and] [t]here was usually a table that had a lot of the brochures.? There
were, however, program speakers, usually a Betaseron prescribing nurse practitioner, who would
present information that contained comparison data for the different medications. And, while the
presentation didn?t explicitly say that Betaseron was superior, the data clearly showed it. In CI-
1?s opinion, the presentations were such that ?you could see clearly the information that they?re
trying to get across to the audience.?

123. CI-5, a Nexavar nurse educator, explained that, just like the Beta Nurses did for
MS patients, she would also educate cancer patients who may be on another oncology

medication. She explained that the programs occurred every one to two months. She stated that

sometimes patients would ask her to compare their current drug to Nexavar. CI-S stated that this

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was a ?tricky? situation because she ?couldn?t get too much into a direct comparison.? She
would simply go over the side-effects and pro?le of Nexavar and tell the patients what they
could expect. However, as stated previously, CI-S had no issue promoting Nexavar.

124. In sum, Bayer and Amgen?s nurse educator programs were nothing more than a
the Covered Products, the Defendants violated the AKS.

Scheme Three: Reimbursement Support Services

125. To induce recommendations of the Covered Products over competing products,
Bayer and Amgen, with the assistance of Lash, offered a third type of kickback: free
reimbursement support services for Prescribers who wrote prescriptions for the Covered
Products.

126. This remuneration was a tangible in-kind bene?t that greatly reduced, and in
some instances eliminated, Prescribers? administrative costs related to prescribing the Covered
Products.

127. Through Lash, Bayer and Amgen hired and trained dozens of skilled workers to
provide free reimbursement support services, including patient insurance bene?t veri?cation
services, patient prior authorization services, and coverage appeals (collectively ?Support
Services?).

128. Lash highlighted its Support Services on its website:

Our dedicated site coordinators strive to become an extension of the provider ?3

team, with a single point-of?contact case management approach that streamlines
and optimizes reimbursement processes. 10

 

10 Lash Reimbursement, (last visited
June 15, 2017).

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129. Bayer and Amgen?s drug reps and Lash?s reimbursement support services
representatives marketed the Support Services when detailing the Covered Products to increase
the likelihood that Prescribers would prescribe the Covered Products. Put simply, in exchange
for prescribing the Covered Products, Bayer and Amgen would assume the Prescribers?
en ent Covered
Products. The more a Prescriber prescribed the Covered Products as a percentage of its overall
prescription volume, the greater the savings and pro?ts to the practice, as time and money spent
on Support Services would now be handled by Bayer and Amgen. As detailed below, the Bayer
and Amgen Support Services were the ?carrot? (remuneration) dangled to induce Prescribers to
prescribe the Covered Products to their patients.

130. Support Services are a tangible bene?t to Prescribers. Support Services have a
great value to Prescribers because these services reduce, and in some instances eliminate, the
administrative costs associated with prescribing drugs. These services also help increase
pro?tability, particularly for of?ce-based Prescribers, who derive most of their revenue from
billing 15, 30, and 45-minute units of service provided to patients during of?ce visits.

131. The technical term for an of?ce visit is ?evaluation and management services? or
In 2012, the most commonly billed Medicare physician service was the $70 ?doctor
of?ce visit? for a 15-minute consultation, closely followed by the $100 ?doctor of?ce visit? for a
30-minute consultation. Medicare pays over $11 billion each year for services alone.
Medicaid and private insurers also pay billions each year.

132. When an of?ce-based Prescriber receives payment for an service, the
payment is intended to compensate the Prescriber for medical care given and administrative tasks

associated with that patient?s care. These tasks include conducting a patient?s prescription drug

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insurance bene?t veri?cation, determining if the drug is on the formulary lists and tiers, seeking
a coverage determination, determining co?pays and deductibles, conducting telephone calls to
patients, responding to patient complaints, returning messages and faxes, handling prescription
re?ll requests, and, where necessary, obtaining prior authorizations11 and managing the resulting




. 1 - 1 13
paper trail. Despite these enormous a ministr- tive cos es of?ce-based

experts 
Prescribers are not permitted to directly charge patients a fee for any of these services. Instead,
Prescribers get paid for these services indirectly through the unit charge.

133. Since a Prescriber?s reimbursement for each of?ce visit is ?xed per unit,
Prescribers are continuously seeking ways to combat overhead costs and reduce expenses in

order to earn more pro?t from each unit billed.

134. One way to earn more pro?t is by reducing the administrative costs associated

 

11 A study of 12 primary care practices published in the Journal of the American Board of
Family Medicine put the mean annual projected cost per full-time equivalent physician for prior
authorization activities between $2,161 and $3,430. The study?s authors concluded that
?preauthorization is a measurable burden on physician and staff time.? See Christopher P.
Morley, eta1., The Impact ofPrior Authorization Requirements on Primary Care Physicians?
O?ices: Report ofTwo Parallel Network Studies, 26 J. Am. Bd. Fam. Med. 93?95 (Jan-Feb.

2013).

12 In 2006, primary care providers spent a mean of 1.1 hours per week on authorizations,
primary care nursing staffs spent 13.1 hours, and primary care clerical staff spent 5.6 hours,
according to a 2009 study published in Health Affairs. The study estimated that the overall cost
to the healthcare system of all practice interactions with health plans, including authorizations,
was between $23 billion and $31 billion annually. See Lawrence P. Casalino, et. al., What Does
it Cost Physician Practices to Interact with Health Insurance Plans? 28 Health Affairs 533-543
(May 14, 2009), 

13 A 2011 study published in Health Affairs found that providers spend an annual average
of nearly $83,000 of overhead staff time and costs associated with coverage plan issues. With
approximately 835,000 physicians practicing in the nation, this translates to over $69 billion
annually. See Dante Morra, et. al., US Physician Practices Versus Canadian; Spending Nearly
Four Times as Much Money Interacting with Payers, 30 Health Affairs 1443-1450 (Aug. 3,

201 1) 0/8/1443 .full.pdf+html.

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with prescribing drugs. If a Prescriber can reduce this cost, each unit will be more
pro?table. These economics have a direct impact on a Prescriber?s prescribing behavior.
Prescribers are less likely to prescribe a drug that imposes an undue burden on support staff

because doing so would mean a decrease in pro?tability resulting from the need to hire more

more likely to prescribe a drug if it can be prescribed with little or no administrative burden.
Thus, the Prescriber?s relative cost and burden in prescribing one company?s drug when
compared to another company?s drug can directly in?uence which drug a Prescriber will
recommend to a patient.

135. These factors are not lost on pharmaceutical manufacturers like Bayer and
Amgen. Indeed, Bayer and Amgen readily incurred the expense of providing Support Services
knowing that these services would act as a powerful inducement to Prescribers to recommend the
Covered Products over a competitor?s products.

136. While pitching Prescribers, Bayer and Amgen sales reps emphasized that, if the
Prescribers prescribed the Covered Products, Bayer and Amgen would provide the services and
resources of a full reimbursement support team to manage the administrative tasks associated
with prescribing the drug. Bayer and Amgen sales reps further emphasized that the cost and
expenses normally associated with managing a patient?s prescription would be shifted to Bayer
and Amgen, thereby increasing the Prescriber?s bottom line.

137. This value proposition was a powerful tool in the hands of the Bayer and Amgen
drug representatives, and it was used to induce Prescribers to recommend the Covered Products.
speci?cally noted that his message to Prescribers included noting that his company was

there to ?make it easy for their reimbursement services within the [Prescriber?s] office.?

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138. Because many drugs are expensive, most, if not all patients, cannot afford therapy
unless it is covered by insurance. As a result, successfully starting patients on a drug therapy
typically requires an initial determination to verify whether the patient has adequate prescription

drug coverage. This process is called ?bene?t veri?cation.? For most Prescribers, the

tack If (1211 take

11.5.3? I.) II Van. .-

multiple calls and over an hour just to determine the nature and extent of the patient?s coverage.
However, if the Prescriber recommends the Covered Products, the veri?cation task for the
Covered Products is handled by Lash?s staff, rather than the Prescriber?s staff.
139. Each day, Lash?s of?ce receives requests from Prescribers to perform bene?t
veri?cations for patients. Each request is immediately forwarded to a veri?cation specialist.
The specialist veri?es the source of the patient?s primary and secondary insurance bene?ts (126.,
private insurance, Medicare, TRICARE, and/or Medicaid), and contacts that insurer to verify the
nature and extent of the patient?s drug bene?t coverage. In cases of Medicare and Medicaid, this
is called a ?coverage determination.? For Medicare patients, coverage determinations tend to be
particularly cumbersome and time-consuming given the complexity of many Part plans.14
140. In addition to veri?cations and coverage determinations, Bayer and Amgen also
provide prior authorization services. Many insurance carriers require a Prescriber to obtain a

prior authorization before prescribing certain medications. Further, if a medication receives an

authorization, that authorization may only be valid for a limited time, such as for one year or a

 

14 These plans generally have four coverage phases: (1) the deductible phase, where
patients pay 100% for drug costs until the deductible amount; (2) the initial coverage limit phase,
where patients pay a percentage of the cost depending on the carrier and the drug?s formulary
position; (3) the coverage gap or ?donut hole? phase, where, in 2015, patients paid 45% of the
cost for brand-name drugs and 65% of the cost for generic drugs; and (4) the catastrophic
coverage phase, where, in 2015, patients paid either 5% of the covered drug cost or $2.65 for
generics and $6.60 for brand name drugs.

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month. After that, the Prescriber must start the prior authorization process over again. The most
expensive Covered Products almost always require prior authorizations from a patient?s drug
coverage plan, and, therefore, these services are particularly valuable to Prescribers. In fact, the

cumbersome process often causes Prescribers to choose less expensive medications that do not

means to contain costs associated with expensive drugs. Thus, if a Prescriber wants to
recommend more expensive drugs, the Part carriers require the Prescriber to go through the
administrative process and make the case for prescribing the drug over a less expensive option.
However, Bayer and Amgen have relieved Prescribers of that burden in order to induce them to
prescribe the Covered Products over competing medications.

141. Bayer and Amgen also provide a service to appeal authorization and coverage
denials. If a patient?s carrier denies coverage for the Covered Products or denies the prior
authorization request, Bayer and Amgen take steps to reverse the adverse determination.

142. The process of obtaining a prior authorization and/or appealing a denial requires
direct input from the Prescriber regarding the patient?s medical history, clinical and laboratory
?ndings, and other information to establish the patient?s medical necessity for a particular drug.
The Prescriber and his or her staff must also develop specialized knowledge about each carrier?s
unique prior authorization and coverage criteria. Although these steps ordinarily require
substantial time and expertise from the Prescriber and their staff, Prescribers are not permitted to
charge a fee separate from the unit charge. Bayer and Amgen arranged for personnel to
handle prior authorizations and appeals, giving a clear advantage and tangible financial incentive
to Prescribers who choose to prescribe the Covered Products over competitors.

143. Bayer and Arngen Support Services are widely used by Prescribers who prescribe

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the Covered Products. CI-3, a Betaseron drug rep, estimated that 95% of the Prescribers who
prescribed Betaseron utilized Lash?s Support Services. Cl-6, a Nexavar drug rep, estimated that
70% of the Prescribers who prescribed Nexavar utilized the Support Services.

144. CI-4, a reimbursement support services representative for Betaseron, believes that
. . past in terms of prescriptions and re?lls
because, ?It helps [Prescribers] not have to worry too much about if that patient can actually
have that medication because you have specialists behind you who [are] contacting the insurance
company.?

145. Further, Cl-6, a Nexavar drug rep, explained that he would go so far as to bring a
reimbursement manager into Prescribers? of?ces to train staff and help with Support Services.
He said, ?So what I did as far as explaining it to the of?ces, [is] I brought in a reimbursement
manager. And we had an in?service with physicians and also with the person in the
[Prescriber?s] of?ce that does the reimbursement . . . . I brought in a coordinator to
talk to the reimbursement person [in the Prescriber?s of?ce] and that was a . . . closer relationship
because we were talking about individual patients for delivery times, making sure that everything
on the money side runs pretty smoothly.?

146. The Support Services have real value to Prescribers. Without them, Prescribers
would have to use their own staff and resources or outsource the Support Services to a private
vendor. Bayer and Amgen give Prescribers a means to ?outsource? this function without any

direct or indirect cost to the Prescriber, but only if the Prescriber prescribers the Covered

Products.

 

15 The reimbursement support program for Nexavar is called REACH.

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147. Violations of Medicare regulations regarding patient privacy and duty of care.
Relator?s investigation also revealed that while carrying out these Support Services, Lash
violated Medicare regulations regarding patient privacy and duty of care. CI-4, a Lash
reimbursement support services representative for Betaseron, explained that when she performs
these services and conta?s a p-?tiert?s inrur-"nce bene?t drug plan representative, she has been
trained to identify herself as calling from ?patient coordination? or ?patient assistance program.?
Similarly, CI-7, a Lash reimbursement support services representative for Nexavar, explained
that when she would call a patient?s insurance bene?t drug plan representative, she used to
identify herself as ?calling from the doctor?s of?ce.? CI-7 admits that after some complaints, her
script was changed to say, ?calling on behalf of the doctor?s of?ce.?

148. These statements are a misrepresentation of Lash?s role, as they are neither a
patient?s ?appointed representative? nor ?calling from the doctor?s office,? and circumvent
Medicare privacy rules regarding the coverage determination and appeal process.

149. Medicare rules give patients the right to prompt coverage determinations and the
right to seek a reconsideration of an adverse coverage determination. These rights are afforded
to all patients seeking prescription coverage for drugs, including MS and cancer patients who
have been prescribed Covered Products. As is detailed above, the coverage determination
requires contacting the patient?s Part carrier and/or Medicaid carrier and conveying medical
information about the patient and the patient?s particular need for the medication. Because of
privacy and HIPAA concerns, Medicare rules only permit three parties to seek a coverage
determination: 1) the patient; 2) the prescribing physician; and 3) the patient?s appointed
representative. 42 CFR 423.560. Lash is neither the patient nor the prescribing physician.

Further, Lash is also not the patient?s ?appointed representative.?

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150. Medicare regulations de?ne ?appointed representative? as follows:

Appointed representative means an individual either appointed by an enrollee or
authorized under State or other applicable law to act on behalf of the enrollee in
?ling a grievance, obtaining a coverage determination, or in dealing with any of
the levels of the appeals process. Unless otherwise stated in this subpart, the
appointed representative has all of the rights and responsibilities of an enrollee in
?ling a grievance, obtaining a coverage determination, or in dealing with any of
the levels of the appeals process, subject to the rules described in part 422, subpart

of this chapter.

42 CPR. 423.560.

1.51. There are typically stringent State rules regarding the form and manner in which
this appointment can be made.

152. Neither Bayer, nor Amgen, nor Lash appear to follow these rules; therefore none
of them can claim to be the patient?s representative. Thus, since Lash is not the patient, the
prescribing physician, nor the patient?s appointed representative, it lacks the legal authority to
engage in the Support Services offered to induce Prescribers to recommend the Covered
Products.? Such conduct raises signi?cant privacy and patient care concerns.

ILLEGAL CONDUCT GIVES RISE
TO A DISTURBING CONFLICT OF INTEREST

153. Defendants? conduct creates a disturbing con?ict of interest for the Prescribers

 

16 Bayer may assert that it is acting as the appointed agent of the prescribing physician.
This purported agency is not authorized by the Medicare regulation nor would Medicare likely
authorized such an arrangement. A physician seeking a coverage determination on behalf of a
patient will likely be in the patient?s Part carrier?s network and under a contract with the Part
carrier. This contract necessarily imposes obligations upon the physician to act truthfully,
honestly and ethically in each and every interaction with the Part carrier. These contracts also
undoubtedly have penalties and consequences if these obligations are not met by the
Prescriber/pharrnacy. Finally, these contracts and the physician?s own duty of care impose a duty
to act in the best interest of the patients. In seeking Betaseron and/or Nexavar reimbursement,
Lash has none of these obligations and duties, and unlike the physician, has a direct ?nancial
self-interest in obtaining coverage for Betaseron and/or Nexavar.

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and nurse educators involved therein. This con?ict can harm patients and vastly increase
pharmaceutical spending.

154. Medical professionals are expected to have no allegiance to or af?liation with any
drug or drug company. Rather, medical professionals are duty?bound to make treatment
decisions based solely 1113f tre best interests 0
have raised concerns that increased promotional spending by pharmaceutical companies on
nurses (mostly in the form of small gifts, dinners or drug samples) is creating a serious con?ict,
and have suggested that a ban or strong limitation on such conduct is needed to protect patients.17

155. The con?ict created by Bayer and Amgen?s conduct, which extends far beyond
simple gifts and drug samples, is signi?cant. By using nurse educators to promote, and creating
incentives for Prescribers to prescribe, the Covered Products, Bayer and Amgen have created a
con?ict with the Prescribers? duty of care to patients. The Prescribers and nurses may
consciously or subconsciously recommend the Covered Products despite cheaper alternatives or
more effective treatments, to the detriment of a patient and the Government.18

156. The con?ict of interest manifests in two related situations, continuity of care19 and

medication adherence. A Prescriber?s decision to keep a patient on a certain drug or switch to a

 

17 Nancy J. Crigger, Pharmaceutical Promotions and Con?ict of Interest in Nurse
Practitioner?s Decision Making: The Undiscovered Country, 17 J. Am. Academy of Nurse
Practitioners 207-12 (May 27, 2005).

18 Judith A. Erlen, Con?ict oflnterest Nurses at Risk!, 27 Orthopaedic Nursing 135-39

(Mar. Apr. 2008). Erien argues that a nurse simply accepting small gifts (such as notepads and
promotional items) or listening to a marketing pitch is enough to cloud their judgment and create
a con?ict of interest. Id. at 137. This is a far cry from the situation highlighted here where the

nurse is indirectly employed by the drug manufacturer.

19 Continuity of care is concerned with quality of care over time. It is the process by
which the patient and his/her physician-led care team are cooperatively involved in ongoing
health care management toward the shared goal of high quality, cost?effective medical care.

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competing drug should be based on patient outcomes. Bayer and Amgen?s conduct, however,
aligns the interest of the Prescribers and nurse educators with that of the drug company, to the
detriment of the patients.

157. As a Beta Nurse, explained, ?We could not compare other medications,

talI ha- w- saw that the patients were able to

UL ?6 CGLIJ. Ii a
bene?t from the drug [Betaseron].? CI-2, a Beta Nurse similarly stated:

In my position, we did not talk about all treatment options because it was

competition and there?s not a good way to do that. It?s dif?cult. You don?t want

to talk about your competition and say things that are bad or good . . . .

Acknowledge that you have competition and that yes, all of these drugs work.

Different drugs will work for different patients. You need to narrow the focus in
talking about your own particular drug instead of selling other people?s medicine.

Similarly, CI-S, a Nexavar nurse educator, explained ?we?re only allowed to talk about
our particular drug. We don?t really get into other therapies.? She also noted that, ?If I sign on
to support the drug, I?ve done my research and I truly feel that it?s bene?cial. So I have no
problem supporting that drug and only that drug in comparison to the others that are on the
market.?

158. Nurse educators? inherent con?ict of interest also manifests in situations
regarding medication adherence. CI-2, a Beta Nurse, explained that she was exposed to statistics
regarding nurse educators and medication adherence. She said ?we had all kinds of glossy
?gures and marketing information about percentages of adherence on this medication before we
used these [nurse educator] services. Here?s the percentage of adherence and compliance after
we implement these services. [T]hey were always dramatic. We could get a 20% increase in
adherence and compliance just by instituting a nurse educator . . . 

159. a Nexavar nurse educator, agreed. Discussing the bene?t to pharmaceutical
companies of deploying nurse educators, she said:

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1 think the overall bene?t is being able to track the prescription and maintain
[medication] compliance . . . . In a way it?s the pharmaceutical company?s bene?t
too keeping a ?nger on the pulse of how people are doing once that script is
written. Because we both know doctors can write names of a prescription [drug],
but if nobody?s selling [the drug] or staying compliant with [the drug], that?s
going to cut into [the pharmaceutical company?s] economic upside.

160. Medication adherence bene?ts Bayer and Amgen by increasing prescription
re?lls. Yet, in the course of caring for patients, there may be times when a patient would have a
better outcome by switching to a more effective drug or a less expensive drug. Indeed, a
Prescriber?s decision to keep a patient on a certain drug or switch to a competing drug should be
driven solely by patient outcomes. However, since these nurse educators and Prescribers?
interests are aligned with Bayer and Amgen?s interest, their independence is compromised.
Defendant?s conduct not only violates the AKS, but raises ethical and patient safety issues for the
nursing profession.

THE BREADTH OF BAYER AND KICKBACK SCHEME

161. The evidence uncovered during Relator?s investigation reveals a kickback scheme
of truly breathtaking proportions.

162. The scheme encompasses every Prescriber that, since at least 2006, received,
directly or indirectly, ?free nurse? services that were paid for by Bayer or Amgen.

163. The scheme encompasses every Prescriber that, since 2006, received a visit from
a nurse educator that purported to provide ?education? concerning MS and cancer on behalf of
Bayer and Amgen.

164. The scheme encompasses every Prescriber that, since at least 2006, received
Support Services that were paid for by Bayer and Amgen.

165. Bayer, Amgen, and their co-Defendants pro?ted from the illegal schemes
described in this Complaint, and Medicare, Medicaid, TRICARE, and Veteran Administration

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Healthcare were made to bear the costs.

166. Since at least 2006, Defendants? actions knowingly have caused pharmacies,
PBMs, Part sponsors, ?scal intermediaries and others to submit millions of dollars in claims to
Government programs for Covered Products provided to bene?ciaries as a result of Defendants?
ements. Those a1 se claims have caused the
Government to disburse billions of dollars in reimbursements that were tainted by kickbacks and

should not have been paid.

COUNT 1 AGAINST ALL DEFENDANTS.
FOR VIOLATIONS OF THE FALSE CLAIMS ACT:
PRESENTING FALSE CLAIMS FOR PAYMENT (31 U.S.C. 3729(altllIAll

167. Relator realleges and incorporates by reference the prior paragraphs as though
fully set forth herein.

168. Relator seeks relief against Defendants under Section 3729(a)(1)(A) of the FCA,
31 U.S.C. 3729(a)(1)(A).

169. As a result of Bayer and Amgen offering or paying, and Bayer and Amgen?s co-
Defendants, physicians, and other health care professionals soliciting or receiving, kickbacks to
purchase, order, or recommend the purchasing or ordering of Covered Products in violation of
the federal AKS, 42 U.S.C. and Defendants caused false and fraudulent
claims for payment to be presented to federal health care programs.

170. Accordingly, Defendants knowingly caused to be presented false or fraudulent
claims for payment or approval in violation of 31 U.S.C. 3729(a)(1)(A).

171. By reason of the false or fraudulent claims that Defendants knowingly caused to
be presented to federal health care programs, the United States has been damaged in a substantial

amount to be determined at trial, and is entitled to recover treble damages plus a civil monetary

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penalty for each false claim.

COUNT 2 AGAINST ALL DEFENDANTSJ
FOR VIOLATIONS OF THE FALSE CLAIMS ACT:
USE OF FALSE STATEMENTS (31 U.S.C. 8 3729(a)(1)(B)l

172. Relator realleges and incorporates by reference the prior paragraphs as though

173. Relator seeks relief against Defendants under Section 3729(a)(1)(B) of the FCA,
31 U.S.C. 3729(a)(1)(B).

174. As a result of Bayer and Amgen offering or paying, and Bayer and Amgen?s co?
Defendants, physicians, and other health care professionals soliciting or receiving, kickbacks to
purchase, order, or recommend purchasing or ordering Covered Products in Violation of the
federal AKS, 42 U.S.C. and Defendants knowingly caused pharmacies,
PBMs, Part sponsors, ?scal intermediaries, and others to make false records or statements that
were material to getting false or fraudulent claims paid by federal health care programs.

175. More speci?cally, the pharmacies, PBMs, Part sponsors, ?scal intermediaries,
and others, falsely certi?ed, and/or represented that the reimbursements they sought for Covered
Products were in full compliance with applicable federal and state laws prohibiting fraudulent
and false reporting, including but not limited to the AKS. Those false certi?cations, statements,
or representations caused federal health care programs to pay out sums that would not have been
paid if those programs had been made aware of the falsity of the certi?cations, statements, or
representations.

176. Accordingly, Defendants caused the use of false records or statements material to
false or fraudulent claims for payment or approval in Violation of 31 U.S.C. 3729(a)(l)(B).

177. By reason of these false records or statements, the United States has been

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damaged in a substantial amount to be determined at trial, and is entitled to treble damages plus a

monetary civil penalty for each false record or statement.

COUNT 3 - AGAINST ALL DEFENDANTSJ
FOR VIOLATIONS OF THE FALSE CLAIMS ACT:
CONSPIRING TO VIOLATE THE FALSE CLAIMS ACT (31 U.S.C. 3729(a)(1)(C)l

tes by reference the prior paragraphs as though
fully set forth herein.

179. Relator seeks relief against Defendants under Section 3729(a)(l)(C) of the FCA,
31 U.S.C. 3729(a)(1)(C).

180. As set forth above, Bayer and Amgen conspired with Amerisource and Lash,
physicians, and other health care professionals to offer or pay kickbacks in exchange for, or to
induce them to purchase, order, or recommend the purchasing or ordering of Covered Products in
Violation of the federal AKS, 42 U.S.C. and thereby causing false and
fraudulent claims to be presented to federal health care programs seeking reimbursement for
Covered Products dispensed in connection with the kickback scheme.

181. Accordingly, Defendants conspired to commit violations of 31 U.S.C. 
3729(a)(1)(A) and 3729(a)(1)(B), in Violation of 31 U.S.C. 3729(a)(1)(C).

182. By reason of the Defendants conspiracy to violate 31 U.S.C. 3729(a)(l)(A)
and 3729(a)(l)(B), the United States has been damaged in a substantial amount to be determined
at trial, and is entitled to recover treble damages plus a civil monetary penalty for each false

claim.

COUNT 4 AGAINST ALL DEFENDANTS.
FOR VIOLATIONS OF THE ARKANSAS MEDICAID FRAUD FALSE CLAIMS ACT.
ARK. CODE ANN. SS 20-77-901 20-77-911

183. This is a claim for treble damages and civil penalties under the Arkansas

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Medicaid Fraud False Claims Act, Ark. Code Ann. 20-77-901 20-77?91 1. Relator realleges
and incorporates the allegations in the preceding paragraphs as if set forth fully herein.
184. Defendants violated the Arkansas Medicaid Fraud False Claims Act by engaging

in the fraudulent and illegal practices described herein, including knowingly causing false claims

185. As a result of the misconduct alleged herein, Defendants knowingly made, used,
or caused to be made or used, a false record or statement to get a false or fraudulent claim paid or
approved by the State of Arkansas.

186. The State of Arkansas, unaware of the false or fraudulent nature of these claims,
paid such claims which the State of Arkansas would not otherwise have paid.

187. By reason of these payments, the State of Arkansas has been damaged, and

continues to be damaged, in a substantial amount.

COUNT 5 AGAINST ALL DEFENDANTS.
FOR VIOLATIONS OF THE CALIFORNIA FALSE CLAIMS ACL
CAL. CODE SS 12650 - 12656

188. This is a claim for treble damages and civil penalties under the California False
Claims Act, Cal. Gov?t Code 12650 12656. Relator realleges and incorporates the
allegations in the preceding paragraphs as if set forth fully herein.

189. Defendants violated the California False Claims Act by engaging in the fraudulent
and illegal practices described herein, including knowingly causing false claims to be presented
to the State of California as described herein.

190. As a result of the misconduct alleged herein, Defendants knowingly made, used,
or caused to be made or used, a false record or statement to get a false or fraudulent claim paid or

approved by the State of California.

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191. The State of California, unaware of the false or fraudulent nature of these claims,
paid such claims which the State of California would not otherwise have paid.

192. By reason of these payments, the State of California has been damaged, and
continues to be damaged, in a substantial amount.


LUULV 1 AGAINST ALL DEFENDANTS,

FOR VIOLATIONS OF THE COLORADO MEDICAID FALSE CLAIMS ACL
COL. REV. STAT. ANN. 88 25.5-4-303.5 - 25.5-4-310

193. This is a claim for treble damages and civil penalties under the Colorado
Medicaid False Claims Act, Colo. Rev. Stat. 25.5-4-303.5 25 .5?4-3 10. Relator realleges
and incorporates the allegations in the preceding paragraphs as if set forth fully herein.

194. Defendants violated the Colorado Medicaid False Claims Act by engaging in the
fraudulent and illegal practices described herein, including knowingly causing false claims to be
presented to the State of Colorado, as described herein.

19.5. As a result of the misconduct alleged herein, Defendants knowingly made, used,
or caused to be made or used, a false record or statement to get a false or fraudulent claim paid or
approved by the State of Colorado.

196. The State of Colorado, unaware of the false or fraudulent nature of these claims,
paid such claims which the State of Colorado would not otherwise have paid.

197. By reason of these payments, the State of Colorado has been damaged, and
continues to be damaged, in a substantial amount.

COUNT 7 -- AGAINST ALL DEFENDANTS,

FOR VIOLATIONS OF THE CONNECTICUT FALSE CLAIMS AND OTHER
PROHIBITED ACTS UNDER HEALTH OR HUMAN
SERVICES ACT FALSE CLAIMS ACTS,

CONN. GEN. STAT. ANN. 88 4-274 4?289

198. This is a claim for treble damages and civil penalties under the Connecticut False

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Claims Act, Conn. Gen. Stat. Ann. 4-274 4-289. Relator realleges and incorporates the
allegations in the preceding paragraphs as if set forth fully herein.

199. Defendants violated the Connecticut False Claims Act by engaging in the
fraudulent and illegal practices described herein, including knowingly causing false claims to be
presented to th? Strte 

200. As a result of the misconduct alleged herein, Defendants knowingly made, used,
or caused to be made or used, a false record or statement to get a false or fraudulent claim paid or
approved by the State of Connecticut.

201. The State of Connecticut, unaware of the false or fraudulent nature of these
claims, paid such claims which the State of Connecticut would not otherwise have paid.

202. By reason of these payments, the State of Connecticut has been damaged, and

continues to be damaged, in a substantial amount.

COUNT 8 - AGAINST ALL DEFENDANTS.
FOR VIOLATIONS OF THE DELAWARE FALSE CLAIMS AND REPORTING 
DEL. C. ANN. TIT. 6. SS 1201 1211

203. This is a claim for treble damages and civil penalties under the Delaware False
Claims and Reporting Act, Del. C. Ann. tit. 6, 1201 - 1211. Relator realleges and
incorporates the allegations in the preceding paragraphs as if set forth fully herein.

204. Defendants violated the Delaware False Claims and Reporting Act by engaging in
the fraudulent and illegal practices described herein, including knowingly causing false claims to
be presented to the State of Delaware, as described herein.

205. As a result of the misconduct alleged herein, Defendants knowingly made, used,
or caused to be made or used, a false record or statement to get a false or fraudulent claim paid or

approved by the State of Delaware.

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206. The State of Delaware, unaware of the false or fraudulent nature of these claims,
paid such claims which the State of Delaware would not otherwise have paid.

207. By reason of these payments, the State of Delaware has been damaged, and
continues to be damaged, in a substantial amount.

9 A AGAINST ALL DEFENDANTS.

Ul?

FOR VIOLATIONS OF THE DISTRICT OF COLUMBIA
MEDICAID FRAUD ENFORCEMENT
AND RECOVERY AMENDMENT ACT OF 2012.
DC. CODE ANN. 88 2-381.01 2?381.10

208. This is a claim for treble damages and civil penalties under District of Columbia
Medicaid Fraud Enforcement and Recovery Amendment Act of 2012, DC. Code Ann. 2-
3 81.01 23 81.10. Relator realleges and incorporates the allegations in the preceding

paragraphs as if set forth fully herein.

209. Defendants violated the District of Columbia Medicaid Fraud Enforcement and
Recovery Amendment Act of 2012 by engaging in the fraudulent and illegal practices described
herein, including knowingly causing false claims to be presented to the District of Columbia, as
described herein.

210. As a result of the misconduct alleged herein, Defendants knowingly made, used,
or caused to be made or used, a false record or statement to get a false or fraudulent claim paid or
approved by the District of Columbia.

211. The District of Columbia, unaware of the false or fraudulent nature of these
claims, paid such claims which the District of Columbia would not otherwise have paid.

212. By reason of these payments, the District of Columbia has been damaged, and

continues to be damaged, in a substantial amount.

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COUNT 10 AGAINST ALL DEFENDANTSJ
FOR VIOLATIONS OF THE FLORIDA FALSE CLAIMS 
FLA. STAT. ANN. 88 68.081 68.092

213. This is a claim for treble damages and civil penalties under the Florida False
Claims Act, Fla. Stat. Ann. 68.081 68.092. Relator realleges and incorporates the
ations in the preceding paragraphs as if set forth fully herein.

214. Defendants violated the Florida False Claims Act by engaging in the fraudulent
and illegal practices described herein, including knowingly causing false claims to be presented
to the State of Florida as described herein.

215. As a result of the misconduct alleged herein, Defendants knowingly made, used,
or caused to be made or used, a false record or statement to get a false or fraudulent claim paid or
approved by the State of Florida.

216. The State of Florida, unaware of the false or fraudulent nature of these claims,
paid such claims which the State of Florida would not otherwise have paid.

217. By reason of these payments, the State of Florida has been damaged, and
continues to be damaged, in a substantial amount.

COUNT 11 AGAINST ALL DEFENDANTS,

FOR VIOLATIONS OF THE GEORGIA FALSE MEDICAID CLAIMS ACT.
GA. CODE ANN. SS 49-4-168 49-4-168.6

218. This is a claim for treble damages and civil penalties under Georgia False
Medicaid Claims Act, Ga. Code Ann. 49-4?168 49-4-168.6. Relator realleges and
incorporates the allegations in the preceding paragraphs as if set fully herein.

219. Defendant violated the Georgia False Medicaid Claims Act by engaging in the

fraudulent and illegal practices described herein, including knowingly causing false claims to be

presented to the State of Georgia, as described herein.

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220. As a result of the misconduct alleged herein, Defendants knowingly made, used,
or caused to be made or used, a false record or statement to get a false or fraudulent claim paid or

approved by the State of Georgia.

221. The State of Georgia, unaware of the false or fraudulent nature of these claims,

paid such claim? which the State 0
222. By reason of these payments, the State of Georgia has been damaged, and

continues to be damaged, in a substantial amount.

COUNT L2 AGAINST ALL 

FOR VIOLATIONS OF THE HAWAII FALSE CLAIMS TO THE STATE ACL
HAW. REV. STAT. 88 661?21 661-31

223. This is a claim for treble damages and civil penalties under the Hawaii False
Claims to the State Act, Haw. Rev. Stat. 661-21 661-31. Relator realleges and incorporates
the allegations in the preceding paragraphs as if set forth fully herein.

224. Defendants violated the Hawaii False Claims to the State Act by engaging in the
fraudulent and illegal practices described herein, including knowingly causing false claims to be
presented to the State of Hawaii, as described herein.

225. As a result of the misconduct alleged herein, Defendants knowingly made, used,
or caused to be made or used, a false record or statement to get a false or fraudulent claim paid or
approved by the State of Hawaii.

226. The State of Hawaii, unaware of the false or fraudulent nature of these claims,
paid such claims which the State of Hawaii would not otherwise have paid.

227. By reason of these payments, the State of Hawaii has been damaged, and

continues to be damaged, in a substantial amount.

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COUNT 13 AGAINST ALL DEFENDANTS,
FOR VIOLATIONS OF THE ILLINOIS FALSE CLAIMS 
740 ILL. COMP. STAT. ANN. $8 175/1 175/8

228. This is a claim for treble damages and civil penalties under the Illinois False
Claims Act, 740 Ill. Comp. Stat. Ann. 175/1 175/ 8. Relator realleges and incorporates the
paragraphs as if set forth fully herein.

229. Defendants violated the Illinois False Claims Act by engaging in the fraudulent
and illegal practices described herein, including knowingly causing false claims to be presented
to the State of Illinois, as described herein.

230. As a result of the misconduct alleged herein, Defendants knowingly made, used,
or caused to be made or used, a false record or statement to get a false or fraudulent claim paid or
approved by the State of Illinois.

231. The State of Illinois, unaware of the false or fraudulent nature of these claims,
paid such claims which the State of Illinois would not otherwise have paid.

232. By reason of these payments, the State of Illinois has been damaged, and
continues to be damaged, in a substantial amount.

COUNT 14 - AGAINST ALL DEFENDANTS.
FOR VIOLATIONS OF THE INDIANA FALSE CLAIMS

AND WHISTLEBLOWER PROTECTION 
IND. CODE ANN. 88 5-11-5.5-18

233. This is a claim for treble damages and civil penalties under the Indiana False
Claims and Whistleblowers Protection Aet, Ind. Code Ann. 5-1 1-5.5-1 Relator
realleges and incorporates the allegations in the preceding paragraphs as if set forth fully herein.

234. Defendants violated the Indiana False Claims and Whistleblowers Protection Act
by engaging in the fraudulent and illegal practices described herein, including knowingly causing
false claims to be presented to the State of Indiana, as described herein.

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235. As a result of the misconduct alleged herein, Defendants knowingly made, used,
or caused to be made or used, a false record or statement to get a false or fraudulent claim paid or
approved by the State of Indiana.

236. The State of Indiana, unaware of the false or fraudulent nature of these claims,

Sta of Indiana would not otherwise 

11"
?111113 VV 1.1 J. J. vu- a. 4.. 

ave paid.
237. By reason of these payments, the State of Indiana has been damaged, and

continues to be damaged, in a substantial amount.

COUNT 15 AGAINST ALL DEFENDANTS.
FOR VIOLATIONS OF THE IOWA FALSE CLAIMS ACT.
IOWA CODE ANN. 88 685.1 685.7

238. This is a claim for treble damages and civil penalties under the Iowa False Claims
Act, Iowa Code Ann. 685.1 685.7. Relator realleges and incorporates the allegations in the
preceding paragraphs as if set forth fully herein.

239. Defendants violated the Iowa False Claims Act by engaging in the fraudulent and
illegal practices described herein, including knowingly causing false claims to be presented to
the State of Iowa, as described herein.

240. As a result of the misconduct alleged herein, Defendants knowingly made, used,
or caused to be made or used, a false record or statement to get a false or fraudulent claim paid or

approved by the State of Iowa.

241. The State of Iowa, unaware of the false or fraudulent nature of these claims, paid
such claims which the State of Iowa would not otherwise have paid.

242. By reason of these payments, the State of Iowa has been damaged, and continues

to be damaged, in a substantial amount.

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COUNT 16 AGAINST ALL 
FOR VIOLATIONS OF THE LOUISIANA
MEDICAL ASSISTANCE PROGRAMS INTEGRITY LAW,
LA. STAT. ANN. 88 437.1 440.16

243. This is a claim for treble damages and civil penalties under the Louisiana Medical
Assistance Programs Integrity Law, La. Stat. Ann. 437.1 440.16. Relator realleges and
incorporates the allegations in the preceding paragraphs as if set forth fully herein.

244. Defendants violated the Louisiana Medical Assistance Programs Integrity Law by
engaging in the fraudulent and illegal practices described herein, including knowingly causing
false claims to be presented to the State of Louisiana, as described herein.

245. As a result of the misconduct alleged herein, Defendants knowingly made, used,
or caused to be made or used, a false record or statement to get a false or fraudulent claim paid or
approved by the State of Louisiana.

246. The State of Louisiana, unaware of the false or fraudulent nature of these claims,
paid such claims which the State of Louisiana would not otherwise have paid.

247. By reason of these payments, the State of Louisiana has been damaged, and
continues to be damaged, in a substantial amount.

COUNT 17 AGAINST ALL DEFENDANTS.

FOR VIOLATIONS OF THE MARYLAND FALSE HEALTH CLAIMS ACT,
MD. CODE ANN.. HEALTH-GEN. 88 8-101 8-111

248. This is a claim for treble damages and civil penalties under the Maryland False
Health Claims Act, Md. Code Ann, Health-General 8-101 8-111. Relator realleges and
incorporates the allegations in the preceding paragraphs as if set forth fully herein.

249. Defendants violated the Maryland False Health Claims Act by engaging in the
fraudulent and illegal practices described herein, including knowingly causing false claims to be
presented to the State of Maryland, as described herein.

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250. As a result of the misconduct alleged herein, Defendants knowingly made, used,
or caused to be made or used, a false record or statement to get a false or fraudulent claim paid or
approved by the State of Maryland.

251. The State of Maryland, unaware of the false or fraudulent nature of these claims,

252. By reason of these payments, the State of Maryland has been damaged, and

continues to be damaged, in a substantial amount.

COUNT 18 AGAINST ALL DEFENDANTS.
FOR VIOLATIONS OF THE MASSACHUSETTS FALSE CLAIMS 
MASS. GEN. LAWS ANN. CH. 12. 88 5A 50

253. This is a claim for treble damages and civil penalties under the Massachusetts
False Claims Law, Mass. Gen. Laws Ann. ch. 12, 5A SO. Relator realleges and
incorporates the allegations in the preceding paragraphs as if set forth fully herein.

254. Defendants violated the Massachusetts False Claims Law by engaging in the
fraudulent and illegal practices described herein, including knowingly causing false claims to be
presented to the Commonwealth of Massachusetts, as described herein.

255. As a result of the misconduct alleged herein, Defendants knowingly made, used,
or caused to be made or used, a false record or statement to get a false or fraudulent claim paid or
approved by the Commonwealth of Massachusetts.

256. The Commonwealth of Massachusetts, unaware of the false or fraudulent nature
of these claims, paid such claims which the Commonwealth of Massachusetts would not
otherwise have paid.

257. By reason of these payments, the Commonwealth of Massachusetts has been

damaged, and continues to be damaged, in a substantial amount.

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COUNT 19 AGAINST ALL DEFENDANTS1
FOR VIOLATIONS OF THE MICHIGAN MEDICAID FALSE CLAIM ACL
MICH. COMP. LAWS ANN. 88 400.601 400.615

258. This is a claim for treble damages and civil penalties under the Michigan
Medicaid False Claim Act, Mich. Comp. Laws Ann. 400.601 400.615. Relator realleges
and 'ncorporates the allegations in the preceding paragraphs as if set forth fully herein.

259. Defendants violated the Michigan Medicaid False Claim Act by engaging in the
fraudulent and illegal practices described herein, including knowingly causing false claims to be
presented to the State of Michigan, as described herein.

260. As a result of the misconduct alleged herein, Defendants knowingly made, used,
or caused to be made or used, a false record or statement to get a false or fraudulent claim paid or
approved by the State of Michigan.

261. The State of Michigan, unaware of the false or fraudulent nature of these claims,
paid such claims which the State of Michigan would not otherwise have paid.

262. By reason of these payments, the State of Michigan has been damaged, and
continues to be damaged, in a substantial amount.

COUNT 20 AGAINST ALL DEFENDANTS.

FOR VIOLATIONS OF THE MINNESOTA FALSE CLAIMS ACL
MINN. STAT. ANN. 88 15C.01 

263. This is a claim for treble damages and civil penalties under the Minnesota False
Claims Act, Minn. Stat. Ann. 15C.01 15C.16. Relator realleges and incorporates the
allegations in the preceding paragraphs as if set forth fully herein.

264. Defendants violated the Minnesota False Claims Act by engaging in the

fraudulent and illegal practices described herein, including knowingly causing false claims to be

presented to the State of Minnesota, as described herein.

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265. As a result of the misconduct alleged herein, Defendants knowingly made, used,
or caused to be made or used, a false record or statement to get a false or fraudulent claim paid or
approved by the State of Minnesota.

266. The State of Minnesota, unaware of the false or fraudulent nature of these claims,
paid such claims which .he Stan of Minnesota would not otherwise have paid.

267. By reason of these payments, the State of Minnesota has been damaged, and

continues to be damaged, in a substantial amount.

COUNT 21 AGAINST ALL DEFENDANTS.
FOR VIOLATIONS OF THE MONTANA FALSE CLAIMS ACL
MONT. CODE ANN. SS 17-8?401 17-8-416

268. This is a claim for treble damages and civil penalties under Montana False Claims
Act, Mont. Code Ann. 17-8-401 17-8-416. Relator realleges and incorporates the
allegations in the preceding paragraphs as if set forth fully herein.

269. Defendants violated the Montana False Claims Act by engaging in the fraudulent
and illegal practices described herein, including knowingly causing false claims to be presented
to the State of Montana, as described herein.

270. As a result of the misconduct alleged herein, Defendants knowingly made, used,
or caused to be made or used, a false record or statement to get a false or fraudulent claim paid or

approved by the State of Montana.

271. The State of Montana, unaware of the false or fraudulent nature of these claims,
paid such claims which the State of Montana would not otherwise have paid.
272. By reason of these payments, the State of Montana has been damaged, and

continues to be damaged, in a substantial amount.

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COUNT 22 AGAINST ALL DEFENDANTS.
FOR VIOLATIONS OF THE NEVADA SUBMISSION
OF FALSE CLAIMS TO STATE OR LOCAL GOVERNMENT ACT.
NEV. REV. STAT. ANN. 88 357.010 357.250

273. This is a claim for treble damages and civil penalties under the Nevada
Submission of False Claims to State or Local Government Act, Nev. Rev. Stat. Ann. 357.010
357.250. Relator realleges and incorporates the allegations in the preceding paragraphs as if
set forth fully herein.

274. Defendants violated the Nevada Submission of False Claims to State or Local
Government Act by engaging in the fraudulent and illegal practices described herein, including
knowingly causing false claims to be presented to the State of Nevada, as described herein.

275. As a result of the misconduct alleged herein, Defendants knowingly made, used,
or caused to be made or used, a false record or statement to get a false or fraudulent claim paid or
approved by the State of Nevada.

276. The State of Nevada, unaware of the false or fraudulent nature of these claims,
paid such claims which the State of Nevada would not otherwise have paid.

277. By reason of these payments, the State of Nevada has been damaged, and
continues to be damaged, in a substantial amount.

COUNT 23 AGAINST ALL DEFENDANTS,
FOR VIOLATIONS OF THE NEW HAMPSHIRE
MEDICAID FRAUD AND FALSE CLAIMS LAW,

N.H. REV. STAT. ANN. $8 

278. This is a ciaim for treble d-?i?nages - 1 civil penalties under me new uarupshirc
Medicaid Fraud and False Claims Law, N.H. Rev. Stat. Ann. 167:61-b 167:61-e. Relator

realleges and incorporates the allegations in the preceding paragraphs as if set forth fully herein.

279. Defendants violated the New Hampshire Medicaid Fraud and False Claims Law

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by engaging in the fraudulent and illegal practices described herein, including knowingly causing
false claims to be presented to the State of New Hampshire, as described herein.
280. As a result of the misconduct alleged herein, Defendants knowingly made, used,

or caused to be made or used, a false record or statement to get a false or fraudulent claim paid or

281. The State of New Hampshire, unaware of the false or fraudulent nature of these
claims, paid such claims which the State of New Hampshire would not otherwise have paid.
282. By reason of these payments, the State of New Hampshire has been damaged, and
continues to be damaged, in a substantial amount.
COUNT 24 AGAINST ALL DEFENDANTS.

FOR VIOLATIONS OF THE NEW JERSEY FALSE CLAIMS ACT.
N.J. STAT. ANN. $8 

283. This is a claim for treble damages and civil penalties under the New Jersey False
Claims Act, N.J. Stat. Ann. Relator realleges and incorporates the
allegations in the preceding paragraphs as if set forth fully herein.

284. Defendants violated the New Jersey False Claims Act by engaging in the
fraudulent and illegal practices described herein, including knowingly causing false claims to be
presented to the State of New Jersey, as described herein.

285. As a result of the misconduct alleged herein, Defendants knowingly made, used,
or caused to be made or used, a false record or statement to get a false or fraudulent claim paid or
approved by the State of New Jersey.

286. The State of New Jersey, unaware of the false or fraudulent nature of these
claims, paid such claims which the State of New Jersey would not otherwise have paid.

287. By reason of these payments, the State of New Jersey has been damaged, and

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continues to be damaged, in a substantial amount.
COUNT 25 AGAINST ALL DEFENDANTS.
FOR VIOLATIONS OF THE NEW MEXICO FRAUD AGAINST TAXPAYERS ACT.
N.M. STAT. ANN. $8 44-9-1 - 44-9-14.

AND THE NEW MEXICO MEDICAID FALSE CLAIMS ACT.
N.M. STAT. ANN. SS 2i14~1 27?14-15

288. This is a claim for treble damages and civil penalties under the New Mexico
Fraud Against Taxpayers Act, N.M. Stat. Ann. 44-9-1 44?9-14, and the New Mexico
Medicaid False Claims Act, NM. Stat. Ann. 27-14-1 27-14-15. Relator realleges and
incorporates the allegations in the preceding paragraphs as if set forth fully herein.

289. Defendants violated the New Mexico Fraud Against Taxpayers Act and the New
Mexico Medicaid False Claims Act by engaging in the fraudulent and illegal practices described
herein, including knowingly causing false claims to be presented to the State of New Mexico, as
described herein.

290. As a result of the misconduct alleged herein, Defendants knowingly made, used,
or caused to be made or used, a false record or statement to get a false or fraudulent claim paid or
approved by the State of New Mexico.

291. The State of New Mexico, unaware of the false or fraudulent nature of these
claims, paid such claims which the State of New Mexico would not otherwise have paid.

292. By reason of these payments, the State of New Mexico has been damaged, and
continues to be damaged, in a substantial amount.

COUNT 26 AGAINST ALL DEFENDANTS.

FOR VIOLATIONS OF THE NEW YORK FALSE CLAIMS AC1.
N.Y. FIN. LAW SS 187 194

293. This is a claim for treble damages and civil penalties under the New York False

Claims Act, NY. Fin. Law 187 - 194. Relator realleges and incorporates the allegations in

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the preceding paragraphs as if set forth fully herein.

294. Defendants violated the New York False Claims Act by engaging in the
fraudulent and illegal practices described herein, including knowingly causing false claims to be
presented to the State of New York, as described herein.

9.5. As a result of the misconduct alleged herein, Defendants knowingly made, used,

or caused to be made or used, a false record or statement to get a false or fraudulent claim paid or
approved by the State of New York.
296. The State of New York, unaware of the false or fraudulent nature of these claims,
paid such claims which the State of New York would not otherwise have paid.
297. By reason of these payments, the State of New York has been damaged, and
continues to be damaged, in a substantial amount.
COUNT 27 AGAINST ALL DEFENDANTS.

FOR VIOLATIONS OF THE NORTH CAROLINA FALSE CLAIMS ACT.
N.C. GEN. STAT. ANN. 85 1-605 - 1-618

298. This is a claim for treble damages and civil penalties under the North Carolina
False Claims Act, NC. Gen. Stat. Ann. 1-605 1-618. Relator realleges and incorporates the
allegations in the preceding paragraphs as if set forth fully herein.

299. Defendants violated the North Carolina False Claims Act by engaging in the
fraudulent and illegal practices described herein, including knowingly causing false claims to be
presented to the State of North Carolina, as described herein.

.500. As a result of the misconduct alieged herein, Defendarts 1 iade, used,
or caused to be made or used, a false record or statement to get a false or fraudulent claim paid or

approved by the State of North Carolina.

301. The State of North Carolina, unaware of the false or fraudulent nature of these

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claims, paid such claims which the State of North Carolina would not otherwise have paid.
302. By reason of these payments, the State of North Carolina has been damaged, and

continues to be damaged, in a substantial amount.

COUNT 28 AGAINST ALL DEFENDANTS.

FOR VIOLATIONS OF THE OKLAHOMA MEDICAID FALSE CLAIMS AOL
OKL. STAT. ANN. TIT. 55. 525 5053 5054

303. This is a claim for treble damages and civil penalties under the Oklahoma
Medicaid False Claims Act, Okl. Stat. tit. 63, 5053 5054. Relator realleges and incorporates
the allegations in the preceding paragraphs as if set forth fully herein.

304. Defendants violated the Oklahoma Medicaid False Claims Act by engaging in the
fraudulent and illegal practices described herein, including knowingly causing false claims to be
presented to the State of Oklahoma, as described herein.

305. As a result of the misconduct alleged herein, Defendants knowingly made, used,
or caused to be made or used, a false record or statement to get a false or fraudulent claim paid or
approved by the State of Oklahoma.

306. The State of Oklahoma, unaware of the false or fraudulent nature of these claims,
paid such claims which the State of Oklahoma would not otherwise have paid.

307. By reason of these payments, the State of Oklahoma has been damaged, and
continues to be damaged, in a substantial amount.

COUNT g9 AGAINST ALL DEFENDANTSJ
FOR VIOLATIONS OF THE RHODE ISLAND STATE FALSE CLAIMS 
R.I. GEN. LAWS ANN. 85 9-1.1-1 - 9-1.1-9

308. This is a claim for treble damages and civil penalties under the Rhode Island State
False Claims Act, R.I. Gen. Laws Ann. 9-1.1-1 9-1.1-9. Relator realleges and incorporates

the allegations in the preceding paragraphs as if set forth fully herein.

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309. Defendants violated the Rhode Island State False Claims Act by engaging in the
fraudulent and illegal practices described herein, including knowingly causing false claims to be
presented to the State of Rhode Island, as described herein.

310. As a result of the misconduct alleged herein, Defendants knowingly made, used,

approved by the State of Rhode Island.

311. The State of Rhode Island, unaware of the false or fraudulent nature of these
claims, paid such claims which the State of Rhode Island would not otherwise have paid.

312. By reason of these payments, the State of Rhode Island has been damaged, and

continues to be damaged, in a substantial amount.

COUNT 30 AGAINST ALL DEFENDANTSJ
FOR VIOLATIONS OF THE TENNESSEE FALSE CLAIMS ACT.
TENN. CODE ANN. $8 4-18-101 4-18-108
AND THE TENNESSEE MEDICAID FALSE CLAIMS ACT.
TENN. CODE. ANN. 88 71-5-181 71-5?185

313. This is a claim for treble damages and civil penalties under the Tennessee False
Claims Act, Tenn. Code Ann. 4-18?101 4-18-108, and the Tennessee Medicaid False
Claims Act, Tenn. Code. Ann. 71-5?181 71-5?185. Relator realleges and incorporates the
allegations in the preceding paragraphs as if set forth fully herein.

314. Defendants violated the Tennessee False Claims Act and the Tennessee Medicaid
False Claims Act by engaging in the fraudulent and illegal practices described herein, including
knowingly causing false claims to be presented to the State of Tennessee, as described herein.

315. As a result of the misconduct alleged herein, Defendants knowingly made, used,
or caused to be made or used, a false record or statement to get a false or fraudulent claim paid or

approved by the State of Tennessee.

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316. The State of Tennessee, unaware Of the false or fraudulent nature of these claims,
paid such claims which the State of Tennessee would not otherwise have paid.

317. By reason Of these payments, the State of Tennessee has been damaged, and
continues to be damaged, in a substantial amount.

COUNT A . INST ALL 

31 GA
FOR VIOLATIONS OF THE TEXAS MEDICAID FRAUD PREVENTION LAW.
TEX. HUM. REs. CODE ANN. es 36.001 36.132

318. This is a claim for treble damages and civil penalties under the Texas Medicaid
Fraud Prevention Law, Tex. Hum. Res. Code Ann. 36.001 36.132. Relator realleges and
incorporates the allegations in the preceding paragraphs as if set forth fully herein.

319. Defendants violated the Texas Medicaid Fraud Prevention Law by engaging in
the fraudulent and illegal practices described herein, including knowingly causing false claims to
be presented to the State of Texas, as described herein.

320. As a result of the misconduct alleged herein, Defendants knowingly made, used,
or caused to be made or used, a false record or statement to get a false or fraudulent claim paid or
approved by the State Of Texas.

321. The State of Texas, unaware of the false or fraudulent nature of these claims, paid
such claims which the State of Texas would not otherwise have paid.

322. By reason Of these payments, the State Of Texas has been damaged, and continues

to be damaged, in a substantial amount.

COUNT 32 AGAINST ALL DEFENDANTS.
FOR VIOLATIONS OF THE VERMONT FALSE CLAIMS ACT.
VT. STAT. ANN. TIT. 32. SS 630 642

323. This is a claim for treble damages and civil penalties under the Vermont False

Claims Act, Vt. Stat. Ann. tit. 32, 630 642. Relator realleges and incorporates the

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allegations in the preceding paragraphs as if set forth fully herein.

324. Defendants violated the Vermont False Claims Act by engaging in the fraudulent
and illegal practices described herein, including knowingly causing false claims to be presented
to the State as Vermont, as described herein.

325. As a result of the misconduct alleged herein, Defendants knowingly made, used,
or caused to be made or used, a false record or statement to get a false or fraudulent claim paid or
approved by the State of Vermont.

326. The State of Vermont, unaware of the false or fraudulent nature of these claims,
paid such claims which the State of Vermont would not otherwise have paid.

327. By reason of these payments, the State of Vermont has been damaged, and
continues to be damaged, in a substantial amount.

COUNT 33 AGAINST ALL DEFENDANTS.
FOR VIOLATIONS OF THE VIRGINIA FRAUD AGAINST TAXPAYERS ACT.
VA. CODE ANN. 88 8.01-216.1 8.01-216.19

328. This is a claim for treble damages and civil penalties under the Virginia Fraud
Against Taxpayers Act, Va. Code Ann. SDI-216.1 8.01-216.19. Relator realleges and
incorporates the allegations in the preceding paragraphs as if set forth fully herein.

329. Defendants violated the Virginia Fraud Against Taxpayers Act by engaging in the
fraudulent and illegal practices described herein, including knowingly causing false claims to be
presented to the Commonwealth of Virginia, as described herein.

330. As a result of the misconduct alleged herein, Defendants knowingly made, used,
or caused to be made or used, a false record or statement to get a false or fraudulent claim paid or
approved by the State of Commonwealth of Virginia.

331. The Commonwealth of Virginia, unaware of the false or fraudulent nature of

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these claims, paid such claims which the Commonwealth of Virginia would not otherwise have
paid.
332. By reason of these payments, the Commonwealth of Virginia has been damaged,
and continues to be damaged, in a substantial amount.
COUNT 34 AGAINST ALL DEFENDANTS1
FOR VIOLATIONS OF THE WASHINGTON

MEDICAID FRAUD FALSE CLAIMS ACT.
WASH. REV. CODE ANN. $8 74.66.005 74.66.1311

333. This is a claim for treble damages and civil penalties under the Washington
Medicaid Fraud False Claims Act, Wash. Rev. Code Ann. 74.66.005 74.66.130. Relator
realleges and incorporates the allegations in the preceding paragraphs as if set forth fully herein.

334. Defendants violated the Washington Medicaid Fraud False Claims Act by
engaging in the fraudulent and illegal practices described herein, including knowingly causing
false claims to be presented to the State of Washington, as described herein.

335. As a result of the misconduct alleged herein, Defendants knowingly made, used,
or caused to be made or used, a false record or statement to get a false or fraudulent claim paid or
approved by the State of Washington.

336. The State of Washington, unaware of the false or fraudulent nature of these
claims, paid such claims which the State of Washington would not otherwise have paid.

337. By reason of these payments, the State of Washington has been damaged, and

continues to be damaged, in a substantial amount.

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PRAYER FOR RELIEF
WHEREFORE, Relator requests that judgment be entered against Defendants as
follows:

treble the Government?s damages in an amount determined at trial, plus the maximum
statutorily-allowed penalty for each false claim submitted in violation of the FCA or State statute
set forth above;

the applicable administrative civil penalties for each violation of the AKS and State?
equivalent statute, as well as an assessment of not more than three times the amount of
remuneration offered, paid, solicited or received, without regard to whether a portion of that
amount was offered, paid or received for a lawful purpose;

(0) an award of costs and the maximum Relator award allowed pursuant to the FCA and
State statutes set forth above; and

(01) such further relief as is proper.

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Dated: June 19, 2017 Respectfully submitted,

Sam Baxter W. Mark Lanier

Samuel F. Baxter (co-lead counsel) Mark Lanier (co-lead counsel)

sbaxter@mckoolsmith.com
Jennifer L. Truelove
(jtruelove@mckoolsmith.com
MCKOOL PC.

104 East Houston, Suite 300
Marshall, Texas 75670

(903) 923-9000

Fax: (903) 923-9099

Eric B. Halper
ehalper@mckoolsmith.com
Radu A. Lelutiu
rlelutiu@mckoolsmith.com
Dana E. Vallera
dvallera@mckoolsmith.com
Karla Y. Valenzuela
kvalenzuela@mckoolsmith.com
MCKOOL SMITH P.C.

One Bryant Park, 47th Floor
New York, New York 10036
(212) 402-9400

Fax: (212) 402-9444

1320803

WML@LanierLawFirm.com
Christopher L. Gadoury

Ryan Ellis
Ryan.Ellis@LanierLawFirrn.com
THE LANIER FIRM

6810 FM 1960 West

Houston, Texas 77069

(800) 723-3216

Fax: (713) 659-2204

ATTORNEYS FOR RELATOR

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