CURRAN ANNOUNCES MEDICAID FRAUD SETTLEMENT
MARYLAND TO RECEIVE NEARLY $1 MILLION

Attorney General J. Joseph Curran, Jr. announced today that the State of Maryland has received $942,518.99 from Abbott Laboratories as its share of a nationwide civil settlement of a Medicaid fraud claim against Abbott’s Ross Products Division. Abbott is an international pharmaceutical and nutritional product company headquartered near Chicago, Illinois.

The nearly one million dollars represents funds recovered for Maryland’s Medicaid programs in the form of restitution and penalties. In total, Abbott has agreed to pay the federal government $382,408,087 and the 50 states and the District of Columbia a total of $32,046,662 to resolve claims that the Ross Products Division defrauded the Medicaid program over a 10-year period. The fraud consisted of causing companies’ that purchased enteral nutrition infusion equipment to bill Medicaid for products that Ross supplied free of charge. In order to induce sales, Ross sold providers feeding pumps and the pump sets or tubes used with them at the price of the pump sets alone and then advised providers that they could bill Medicaid separately for both items. Ross also offered other prohibited sales incentives such as up-front payments, monetary incentives and discounts to certain customers to encourage them to purchase equipment from Ross for ultimate use by Medicaid beneficiaries.

In addition to agreeing to settle civil claims with the federal government and all 50 states, C.G. Nutritionals, Inc., an Abbott subsidiary, has pleaded guilty and been convicted in federal court in the Southern District of Illinois of one count of obstruction of a criminal investigation of health care offenses. C.G. Nutritionals, Inc. has been sentenced to a fine of $200 million and placed on probation for five years. The plea agreement also requires Abbott to cooperate with any additional state investigations growing out of these schemes.

The Maryland recovery came through the efforts of the Office’s Medicaid Fraud Control Unit. The Maryland Unit is a member of the National Association of Medicaid Fraud Control Units which, through the efforts of a team composed of units from Missouri, Illinois and Ohio, negotiated the state recovery. “We are pleased,” stated Attorney General Curran, “with the efforts of federal and state officials to secure both a criminal conviction and substantial civil recoveries for Medicaid. This case demonstrates that cooperative efforts by federal and state law enforcement officials will ferret out fraud committed by even the largest companies.”

#