HOUSTON (Legal Newsline) – A whistleblower who brought suit resulting in a $10.6 million partial judgment against a medical laboratory for allegedly charging false mileage fees to pick up medical specimens is seeking $424,370 in attorney fees, which includes $4,335 in out-of-pocket expenses.
The lab, meanwhile, is appealing the final judgment. On July 26, the defendants filed for an appeal with the U.S. Court of Appeals for the Fifh Circuit in New Orleans.
Plaintiff Richard Drummond brought a qui tam action in 2008 claiming violation of the federal False Claims Act on behalf of the U.S. government against BestCare Laboratory Services, a diagnostic lab testing clinic located in Webster, a suburb of Houston.
The False Claims Act provides that a whistleblower in a successful fraud case, in addition to sharing in the proceeds recovered by the U.S. government, is also entitled to expenses incurred plus reasonable attorney fees and costs.
Drummond alleged the defendant Karim A. Maghareh of BestCare submitted false claims to Medicare for inflated and excessive mileage charges in picking up specimens from patients and transporting them to the lab.
Maghareh and his wife, Farzenah Rajabi, founded BestCare in 2002 to test lab specimens mostly from elderly and disabled patients.
BestCare allegedly billed Medicare for the miles the collected specimens traveled even when a technician did not accompany the specimens, but instead were shipped by air for $100 per batch. Specimens were collected in Texas communities including Dallas, San Antonio and El Paso, and returned to Webster.
The allegation reads specimen travel expenses were billed to Medicare as if they had been collected one-by-one and returned the distance as if by auto, rather than shipped in a bunch by air.
The U.S. government intervened in the lawsuit in 2011 and in August 2014, the court entered a $10.6 million partial judgment against BestCare for billing "travel expenses it did not incur," Drummond's July 31 motion for attorneys' fees states.
In April, a $30,571 judgment for violation of the False Claims Act was added.
The defendants asked the court to reconsider its opinion on the False Claims Act violation April 23. The court denied the reconsideration request July 16.
U.S. District Judge Lynn N. Hughes, in an April 3 opinion rendered on a request by Magareh for summary judgment, said no conclusion had been reached by the Medicare contractors and BestCare had not provided the contractors with travel logs, data that would have been the "most helpful."
“Even if the contractors had discerned BestCare’s scheme, their knowledge remained internal,” Hughes said in the opinion. “They did not inform the public or publish the results in a public document.”
The end result, Hughes stated, was that for a single specimen shipment, the public was charged $1,500 in travel expenses for a $43 blood test.
Hughes said no reasonable person could agree with a statement from the defendant that because Medicare had paid the billings, it should have assumed the payments were reasonable.