The False Claims Act group, which falls within the Medicaid Fraud Control Unit in the Office of the Insurance Fraud Prosecutor, handles state FCA cases and participates in federal global cases through the National Association of Medicaid Fraud Control Units (NAMFCU).These cases arise when a plaintiff claimant (known as a relator) alleges that an individual or corporate defendant knowingly has presented or caused to be presented a false claim to a State Medicaid program.

“Through its collaboration with the National Association of Medicaid Fraud Control Units, the New Jersey’s Medicaid Fraud Control Unit quadrupled the amount of recoveries as compared to 2011,” Attorney General Chiesa said. “That performance is a testament to the excellent work of our Medicaid Fraud Control Unit and its strong working relationship with its federal partners.”

“Since 1992, the Medicaid Fraud Control Unit has reached settlements totaling almost $146 million for the New Jersey Medicaid Program in False Claims Act cases,” Acting Insurance Fraud Prosecutor Ronald Chillemi noted. “The $45 million recovered in 2012 represents the largest amount of funds recouped in a single year over the past twenty years.”

Some of the highlights of the lawsuits include:

In a payment dated Aug. 22, 2012, New Jersey received $22.3 million as part of a global settlement with GlaxoSmithKline that resolved allegations that the company engaged in off-label marketing of certain drugs, underpaid on rebates it owed to state Medicaid programs and touted its diabetes drug, Avandia, as having certain health benefits despite a lack of adequate supporting evidence.

On Oct. 3, 2012, the state received $7.15 million from Abbott Laboratories to resolve allegations that Abbott illegally marketed and sold the prescription drug Depakote and its derivatives for various off-label uses and paid kickbacks to long-term care pharmacy providers and healthcare professionals to further the company’s sale of these drugs. The settlement covers conduct from 1998 through 2008.

On May 14, 2012, the state received $6.21 million, its share of a $200 million national Medicaid settlement with Merck Sharpe & Dohme Corp. (Merck). Through this settlement, Merck settled claims that it marketed and sold its drug Vioxx for off-label uses and misrepresented the cardiovascular safety of the drug and made other false and misleading representations about Vioxx.

Finally, in a payment dated Aug. 8, 2012, New Jersey received $7.0 million from McKesson Corporation to resolve allegations that between August 2001 and March 2005, McKesson manipulated the average wholesale price of drugs and thereby artificially increased its Medicaid reimbursements.

Acting Insurance Fraud Prosecutor Chillemi commended the analysts, attorneys, auditors and support staff in the Medicaid Fraud Control Unit on their successes in 2012. The unit is headed by Assistant Attorney General Josh Lichtblau.

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