AG Kilmartin Announces a $40.1 Million Settlement with CareFusion
Monday, January 13, 2014
CareFusion will pay $40.1 million to the states and the federal government under the terms of the civil settlement. The settlement resolves a qui tam, or whistleblower, lawsuit filed in the United States District Court for the District of Kansas, under the provisions of the federal False Claims Act and analogous state False Claims statutes. As part of the settlement, approximately will be $59,000 returned to Rhode Island’s Medicaid budget.
“As our healthcare system evolves and changes, it is critical that companies engaged in the industry operate fully within the boundaries of the law and established regulations" said Attorney General Peter F. Kilmartin. "In this instance, CareFusion stepped across the line in promoting products not approved for certain uses, potentially risking patient safety, for the benefit of the company’s bottom line. This type of reckless and greedy action will not be tolerated.”
CareFusion, a corporation spun off from Cardinal Health in 2009, allegedly promoted and marketed Chloraprep for uses that were not approved by the Food and Drug Administration (FDA) some of which were not medically accepted indications. Once the FDA approves a surgical solution such as Chloraprep as safe and effective, its manufacturer cannot market or promote it for an “off-label” use, i.e., any use not specified in the FDA-approved product label.
Chloraprep was approved by the FDA for specific inpatient hospital procedures, including the preparation of a patient’s skin prior to surgery or injection, but the FDA explicitly rejected its use for intravenous preparation and suture care.
The lawsuit alleges that during the period between September 1, 2009 and August 31, 2011, CareFusion promoted Chloraprep for use with intravenous preparation and suture care, which went beyond the FDA-approved label uses for Chloraprep. CareFusion also allegedly made and disseminated unsubstantiated representations about the use of Chloraprep solutions during the same time period.
The states further contend that during the course of several months in 2008, CareFusion’s predecessor corporationentered into agreements, as to which CareFusion assumed legal and financial responsibility, for the payments of monies to an entity known as Health Care Concepts, Inc. (HCC). The payments were allegedly made in order to conceal kickbacks to the physician-owner of HCC, for the purpose of promoting and inducing providers to use Chloraprep, in violation of various federal and state anti-kickback statutes.
CareFusion’s alleged unlawful conduct caused false and/or fraudulent claims to be submitted to or caused purchases by government funded health care programs, including the state Medicaid programs.
Related Slideshow: 13 Biggest Blunders in Rhode Island of 2013
13 School Buses
Shortly after the 2013-2014 school year got off to its start in Providence, it quickly stalled when bussing issues arose, stemming from an incident where a bus got lost on the East Side and let students off.
Using the power of social media and advocacy, parents of not only the students involved on the bus in question, but others as well banded together to demand accountability. They sought answers from the City of Providence and the bussing company, First Student, as to why the buses were late, why monitors were missing from some buses, and why it was so hard to reach anyone when they called.
When a report came to light that showed that consultants had suggested multiple options for cost savings besides the re-routing chosen, parents and the public questioned the Taveras administration's decision to cut costs when kids were arriving late to school, and home at night, up to 90% of the time.
The school committee brought the consultants back in to discuss better options, the results of which are yet to be seen. There is little doubt that parent advocates who used Facebook to share their stories and call for answers from the city and bussing company will continue to press the issue that students are brought to and from school on time.
12 John DePetro
Radio talk show host John DePetro may have uttered his now infamous "whores" line back in September about female union members who picketed a fundraiser for General Treasurer Gina Raimondo, but a campaign that began quietly to protest his language picked up steam—and attention—in the weeks that followed.
The group For Our Daughters started a change.org petition to pressure advertiser Alex and Ani to sever ties with the show and DePetro. While DePetro offered an apology, it apparently wasn't enough for Governor Chafee, who signed the petition, and said he would not appear on WPRO as long as it had a relationship with DePetro. Soon other elected officials and candidates for statewide office followed suit, and DePetro hasn't been on air since the situation heated up.
In his defense, a change.org petition was started in support of DePetro by "RI Citizens for Free Speech", which writes that DePetro is "under attack by a paid organized union smear campaign designed to silence his vocal criticism. Do not allow politicians and unions to suppress free speech guaranteed by the First Amendment! We will not tolerate the sponsorship of the callers or the host of the John DePetro Show!"
GoLocal asked experts as to what they thought of the First Amendment defense—and ultimately, the decision will now lie in the hands of the brass of WPRO. Will DePetro stay or go? We'll most likely find out in 2014.
11 Teamster's Threat
The inside machinations of internal Teamsters politics don't usually rise to the surface of the general public—or to the level of the Independent Review Board, established by consent decree between the Teamsters and U.S. government to investigate allegations of corruption—but it happened when New England Teamsters boss Sean O'Brien threatened retaliation against the opposition slate in the recent Local 251 elections in Rhode Island.
GoLocal obtained a copy of the video which features O'Brien, President of Teamsters Local 251 in Charlestown, MA and President of Joint Council 10, saying that Joe Bairos is one of his closest allies. Bairos was the Secretary-Treasurer of Teamsters Union Local 251 in Providence, RI.
"Anyone who takes on Bairos—they've got a major problem, they'll never be our friends—they need to be punished, held accountable for their actions," said O'Brien, who continued, "TDU sucks, go home...there's no doubt in my mind you're going to kick TDU's ass."
O'Brien's actions earned him an investigation from the Review Board—outlined here—and Teamsters for a Democratic Union, the opposition slate targeted by O'Brien, were ultimately successful in RI. O'Brien's actions marked one of 2013's biggest blunders.
10 Tripathi Accused
One of the saddest and most tragic blunders of 2013 happened when Brown student Sunil Tripathi, who had been missing since last seen on campus in March, was mistakenly identified as a suspect in the Boston marathon bombings in the chaotic days that followed.
When the Boston bombings occurred and the news and social media was awash in trying to identify who the bombers were, Tripathi was mistakenly identified in one of the photos as being a suspect. For several hours, Reddit, Facebook, Twitter, lit up with speculation that the missing student was somehow involved with the act of terrorism.
Tripathi's named was cleared when the Tsarnev brothers were identified and pursued, but not after putting Tripathi's family in national—and international—media spotlight the case of mistaken accusation. Tripathi's family, in a display of grace and courage, issued a statement to thank those who supported them throughout the ordeal, and used the events to raise awareness of finding Tripathi. Sadly, Tripathi's body was discovered a week later off India Point in Providence.
When the City of Providence announced that the pool at the Davey Lopes Recreational Center would not be reopened in the summer of 2013, citing declining numbers in attendance, it set off a community reaction that might not have been anticipated by the Taveras administration.
A report on Providence recreation written by a Mayoral Fellow to Angel Taveras—and leaked to GoLocalProv—showed that the city administration ignored its own commissioned analysis, while it has systematically reduced recreation services, notably the closing of city pools.
The city said they would replace the pool with a water park, but community advocates from Councilman Davian Sanchez to Ray Rickman to Leah Williams Metts -- and dozens of others -- decried the move to deny youth the recreational opportunity of a swimming pool, and the ability to learn how to swim.
An agreement was reached between pool supporters and the Mayor's office—the Friday before Taveras announced his run for Governor the following Monday. What was 2013's biggest blunders will no doubt be revisited in 2014, as the re-opening of the pool will surely be on the table.
8 Schilling's Knock Out
It has been no secret that there has been no love lost between Curt Schilling and Governor Lincoln Chafee in the fallout of the demise of 38 Studios, with a good deal of back-and-forth (and name-calling) taking place on Twitter.
In 2012, Schilling called Chafee a "dunce of epic proportions" over the handling of 38 Studios, saying that Chafee had always wanted the video game company to fail all along. "[Chafee] had a plan and executed it," Schilling said an interview with WEEI.
Schilling's penchant for tweeting got the best of him when he was teed up by Rhode Island comedian and heckler Jon Stenning, who after seeing Schilling appear on ESPN, decided to light the former Red Sox pitcher up.
Schilling took the bait. He tweeted back in response, "How about I just knock you out?"
As Rhode Island—and taxpayers—continue to address paying back over $100 million on the bonds issued for the video game company in 2010, Schilling's tweet goes to show just how heated the failure of 38 Studios continues to be.
7 Raimondo Fee Disclosure
When the American Federation of State, County, and Municipal Employees (AFSCME) asked for information from the Rhode Island General Treasurer's office on state pension fund money manager fees—and was told it would have to pay $1500 for the information, which might not even produce the information requested—a firestorm erupted over the transparency and disclosure (or lack thereof) of information from the General Treasurer's office.
"That language was clearly written for a desired outcome, and that was that was to deter us from following up on the request," said AFSCME's Kreisberg. "These are public records—and they want to gouge us to get them, if at all? I don't think so."
Forbes columnist Ted Siedle weighed in. "In my experience, hedge funds—and their managers—know exactly what they're charging, and what their management fees are in basis points. These numbers should be readily available," said Siedle. "For a public office to ask that kind of money for public records, while legal, is pretty much unheard of."
In a departure from current Rhode Island General Treasurer Gina Raimondo's strategy, former General Treasurer Frank Caprio announced that he will reduce the number of money managers and use of hedge funds in his bid for the office in 2014.
6 Tobin on Mandela
Archbishop Thomas Tobin of Providence, who announced in August his decision to switch his voter registration from Democrat to Republican, made waves in the Ocean State—and beyond—when he took the opportunity of South African Leader Nelson Mandela's passing to criticize the civil and human rights leader for his position on abortion.
In a statement released on the Diocese of Providence's website on December 8, Tobin wrote, "There is part of President Mandela’s legacy, however, that is not at all praiseworthy, namely his shameful promotion of abortion in South Africa. In 1996 Mandela promoted and signed into law the “Choice on Termination of Pregnancy Bill” that, according to the New York Times, “replaced one of the world’s toughest abortion laws with one of the most liberal.
Tobin continued, "While we pray for the peaceful repose of President Mandela’s immortal soul and the forgiveness of his sins, we can only regret that his noble defense of human dignity did not include the youngest members of our human family, unborn children.”
A group called "Faithful America" responded by presenting Tobin with 19-thousand signatures demanding that he apologize for the remarks. In the petition they wrote, “Bishop Tobin, your shameful and mean-spirited attack on Nelson Mandela is an embarrassment to the church.”
5 Strip Club Controversy
When it was discovered that a 15-year-old girl was working at Cheaters strip club in Providence in July, the city's "adult entertainment" underbelly deservedly took one on the chin.
Following the disclosure, Providence City Council President Michael A. Solomon announced he would be introducing new legislation to ensure that minors are not inadvertently hired to work at adult entertainment venues in the city of Providence.
“The recently reported case of a 15-year old girl being hired as a performer at a local adult entertainment establishment made clear the need for stricter requirements,” stated Solomon. In 2009, Solomon sponsored the city ordinance which prohibits people under the age of 18 from working at such venues. After the City approved the ordinance, the State also passed a law barring minors from employment at adult entertainment establishments.
Solomon would require adult entertainment licensees to obtain a criminal background check for each prospective employee, for the specific purpose of age verification. “Relying only on a driver’s licenses or a state-issued photo identification card as proof of age has proven to be problematic in a number of cases at strip clubs, as IDs can be manipulated and falsified,” Solomon said. “Requiring background checks for all employees, as a condition of the license for an adult entertainment venue, will allow owners and managers to obtain reliable information, so that they can be sure they are not violating city and state law by hiring minors.
Cheaters—and owner Charles Tapalian—has close political ties, with former member State Rep Peter Petrarca representing the club this year when it came under review from the Board of Licensing—and Tapalian being a major political donor, having given to Solomon, as well as Council member Terry Hassett. With this year's Cheaters' misstep, watch for closer scrutiny paid to the strip clubs—as well as politicians.
4 Chafee Opting Out
In September, when Governor Chafee's office sent a media advisory for the press regarding an announcement being made at the DMV, few could have envisioned what that would be—that the former Senator and Mayor of Warwick would not be seeking running for Governor for a second term.
In 2010, Chafee switched from the GOP to run for Governor as an Independent and split the four-way contest to win the Governor's office with 39% of the vote.
Chafee then made a jump to the Democratic party in May of this year, after secretly meeting with President Obama—who then offered up his fundraising support to the former Republican. The potential 2014 Rhode Island Democratic gubernatorial primary looked like it would soon be a very heated battle between Chafee, Providence Mayor Angel Taveras, and General Treasurer Gina Raimondo.
Chafee's bowing out left the the Governor a "lame duck"—and dramatically changed not only the playing field for 2014, but how the game will be played.
Said Jennifer Duffy with the Cook Political Report, "At least through the primary, the race was going to be all about Chafee, his record, and his style of governing. Now, the contest takes on all of the characteristics of an open seat. The candidates are going to have to lay out very clear visions for how they would lead the state. At the same time, they are going to have to focus more on each other. Chafee was a very unifying target."
3 Empty Superman Building
In the middle of the 2013 General Assembly session, privately-owned, Massachusetts-based High Rock Development, who purchased the Industrial National Bank Building in 2008, indicated it was seeking $48 million in historic tax credits from Rhode Island, in order to convert the historic "Superman" structure into roughly 250 to 275 apartments in the 428 foot tall office tower.
In 2011, former Providence Mayor Joseph Paolino warned that the building was a "ticking time bomb" - speculating what could happen if anchor tenant Bank of America were to leave. Prophecy became reality when Bank of America moved out in 2013, leaving the iconic downtown building vacant.
However, turning the building into predominantly residential space—with assistance from the city and the state—was not an easy sell, as taxpayer backing of 38 Studios remained fresh on Rhode Islanders' minds.
The timing of the proposal—well into the General Assembly session—was one of the cautionary flags for some. "This is looking way too similar to 38 Studios with the timing of all of this," said Representative Patrick O'Neill, who had been part of Speaker of the House Gordon Fox's leadership team - but split on the handling of 38 Studios. "The mid-session announcement, the prospect of it getting pushed to an 11th hour vote with no idea what it looks like. We just can't afford to go down that road again."
In total, the funding that the developers were looking for from the state amounted to approximately $75 million in local, state, and federal funding—which just so happened to be the amount of the EDC's doomed loan to 38 Studios. Would it have made a difference had the amount not been so tied to the failed video game company? Former—and current—gubernatorial candidate Ken Block said, "Hang on to your wallets! The Superman Building project has all the makings of another 38 Studios."
Said Block, "Fool me once, shame on you. Fool me twice shame on me. The State of Rhode Island has already been duped by the 38 Studios debacle and many legislators indicated that they did not know on what they were voting when they approved that deal."
2 CCRI President Pay
CCRI President Ray Di Pasquale, who began his tenure in 2006 with a salary of $180,000, has for the past three years had an annual salary of $265,000 and a total compensation package including health and retirement of over $370,000 due to his dual role as interim commissioner of higher education—at the time.
However, due to the reorganization of the state's education boards into the one Board of Education, Di Pasquale's most recent contract is solely for his duties at CCRI—at the same pay level as when Di Pasquale serving as commissioner as well.
GoLocal uncovered that since 2006, over $50,000 has been spent on maintaining the pool on the President's property on the CCRI Knight Campus—and that in the same time frame, DiPasquale has expensed over $20,000 in entertaining costs at the private University Club.
For the 2010-2011 school year, CCRI’s three-year graduation rate was just 9.6 percent, ranking Rhode Island No. 48 in the country when it comes to graduation rates from two-year institutions.
As student loan debt surpasses $1 trillion in the United States, tuition costs have increased more than 1,000 percent in the past three decades. In 2012, the average salary for a community college president was $167,000 in 2012.
1 Restaurant Violations
These were just some of the health violations listed by the Rhode Island Department of Health upon inspecting restaurants in Providence over the past year.
The Rhode Island Department of Health Office of Food Protection Inspection Report Access Page contains a searchable database of all inspected establishments in the state—and also allows people to sign-up for e-mail alerts "when your favorite restaurant is inspected."
GoLocal reported on restaurants looked at by the state between July 15, 2012 and July 15, 2013; establishments what were not looked at during this time would not have been reflected.
Nearly half of the restaurants inspected in the city over the past year had less than ten violations reported during a single inspection. Those with higher levels of violations were often inspected again later in the year, and for most of those restaurants, the number of violations found the second time decreased significantly.
While some restaurants had over 20 violations found by the Department of Health—a number of establishments thought the inspectors comments helped to point out—and turn around—any health code blunders.
"When the inspector came, she was fantastic," said Lucia Chacon of Ristorante Lucia on Atwells Avenue. "She was very helpful, explaining what needed to be done, which we took care of. It was a very good thing."
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