Affirmative Civil Enforcement (ACE) refers to filing civil lawsuits on behalf of the United States. The purpose of these civil actions is to recover government money lost to fraud or other misconduct or to impose penalties for violations of federal health, safety, or environmental laws. The following are examples of prosecutions under the ACE program:
- contractors who provide defective goods or worthless services to Federal agencies or who charge the government for goods and services not delivered;
- health care providers who defraud Federal health programs like Medicare and Medicaid by overbilling for goods and services or billing for goods and services that were not rendered, not medically necessary, or substandard;
- individuals who defraud Federal agencies such as the Small Business Administration, the Department of Housing and Urban Development, the Department of Education and other Federal agencies by using misrepresentations to obtain grants, loans, and other benefits to which they are not entitled;
- companies and individuals to recover the government’s costs to clean up polluted land and water caused by their misconduct.
Usually ACE cases are pursued under the Federal False Claims Act which allows the United States to sue those individuals or organizations who made false or fraudulent claims against the government. The Act provides for recovery of triple the amount of damages incurred by the United States, plus a monetary penalty for each violation.
Many of these cases result from whistleblower lawsuits under the False Claims Act. Individuals or entities with inside information about fraudulent conduct may file suit on behalf of the United States. The ACE program then undertakes an investigation of the allegations. The United States may choose to intervene in and take over prosecution of such a suit or may choose to decline and allow the whistleblower to pursue the case on behalf of the United States. Whomever pursues the case, if there is a recovery for the government, the whistleblower may receive a percentage of the money.
Investigations are undertaken with agents from the FBI, the Office of the Inspector General for the U.S. Department of Health and Human Services, and other federal and state agencies. ACE cases can present facts and issues that warrant criminal as well as civil prosecution.
The ACE Program in the Eastern District of Tennessee has gained a national reputation for its outstanding work. We have recovered millions of dollars and significant administrative oversight agreements by pursuing health care and procurement fraud cases and investigations involving health care providers and suppliers such as hospitals, doctors, pharmaceutical companies, and durable medical equipment suppliers, as well as government contractors. Some examples of the significant ACE recoveries in recent years include:
- $40 Million settlement with the operator of Erlanger Medical Center for violations of the Stark law, Anti-Kickback statute, and the False Claims Act, including a comprehensive five-year Corporate Integrity Agreement with the Office of Inspector General of the U.S. Department of Health and Human Services to ensure continued compliance with federal health care benefit program requirements.
- $1.7 Million civil settlement with East Tennessee Heart Consultants, a practice group of 42 physicians, for violations of the False Claims Act relating to improperly withholding and failing to refund overpayments of medical expenses by Medicare and other government health plans, including a comprehensive five-year Corporate Integrity Agreement. As a result of the investigation, the practice also agreed to refund an additional $1.2 million to a large number of its patients from whom it had received overpayments.
- $1.1 Million consent judgment against psychiatrist Gulshan Sultan for false claims submitted to Medicare and Medicaid/Tenncare for psychiatry services not provided as billed.
- $6.2 Million settlement with The Shaw Group and its subsidiary Stone & Webster Construction, Inc., relating to False Claims Act allegations in performance of a contract with the Tennessee Valley Authority (TVA), including the first corporate integrity and monitoring agreement in TVA history between the Office of Inspector General and a TVA contractor.
- $1.3 Million settlement with Louisville-based Kindred Healthcare, Inc. and its successor PharMerica Healthcare Pharmacy, LLC, for violations of state and federal laws regarding overbilling TennCare and the Medicaid program for pharmaceuticals.
- $1.8 Million settlement with Benchmark Physical Therapy for violations of state and federal laws regarding overbilling Medicare and TennCare/Medicaid for physical therapy services.
- $1.27 Million settlement relating to clean-up costs under the Oil Pollution Act and civil Clean Water Act penalties arising out of an explosion of an oil well in Oliver Springs, Tennessee, operated by Walden Resources, LLC, and ZTX Drilling, LLC.
To report fraud and abuse against the Federal government, please contact the ACE Coordinator for the Eastern District of Tennessee.