Compliance Programs:
I. Introduction
II. Alleged Violations of the False Claims Act
III. Compliance
IV. Sentencing Guidelines
V. What Should be Done?
VI. Penalties for Violation
VII. Moral of the Story
I. Introduction
On September 23, 2004, the United States District Court for the Eastern District of Pennsylvania issued a decision in the case of United States v. Merck-Medco Managed Care, LLC. This is a "qui tam" (“who sues on behalf of the king as well as for himself”) case that the Government brought against Merck-Medco for violation of the False Claims Act, 31 USC 3729 and the Anti-Kickback Act of 1986, 41 USC 52. Medco is a pharmacy benefit manager (PBM) that was a subcontractor to Blue Cross Blue Shield Association under a prime contract with the U. S. Office of Personnel Management (OPM). Medco was obligated to provide drug benefits to employees of the United States Government under their health plan that was managed by OPM.
The Government alleged that Merck-Medco made false statements and cancelled or
destroyed mail order prescriptions to avoid paying penalties for delays in filling orders (“Liquidated Damages”), billed for prescriptions containing less than the required number of pills, created false records showing that physicians had been contacted to discuss various issues when no such contact took place, fraudulently induced physicians to authorize drug switches, and favored Merck drugs over other manufacturers even though Merck drugs were more expensive and may not have been prescribed by the attending physician.
“Qui Tam” is a provision of the False Claims Act, originally enacted in 1863 and later amended in 1986, that allows a private citizen to bring an action in the name of the United States charging fraud by Government contractors and other entities that receive or use Government funds, and share in any money recovered. The False Claims Act has both a civil and a criminal section. The Act makes it illegal for a Government contractor to:
1. knowingly present, or cause to be presented, to an officer or employee of the United States Government or a member of the Armed Forces of the United States a false or fraudulent claim for payment or approval;
Discussions After Final Proposal Revision, the Case with Federal Contracting
Key Personnel Clauses in Federal Government RFP
Timely Submission of Proposals in Response to Federal RFPs
Options in Federal Contracts
