Healthcare Fraud

A settlement has been reached to resolve False Claims Act Allegations against St. Vincent Healthcare, a hospital located in Billings, MT, and Holy Rosary Healthcare, a hospital located in Miles City, MT. They are accused of improperly providing incentive pay to physicians that made referrals to the hospitals.

The allegations were brought by the U.S. Attorney’s Office for the District of Montana, the Department of Justice’s Civil Division, the Office of Inspector General of the U.S. Department of Health and Human Services, and the FBI.

The settlement of $3,950,000 resolves allegations that the hospitals paid several physicians incentive compensation that took into account the value or volume of their referrals by improperly including certain designated health services in the formula for calculating physician incentive compensation. These issues were disclosed by the hospitals to the government. The claims settled by this agreement are allegations only.

A settlement has been reached in a whistleblower class action lawsuit brought against Adventist Health System/West, dba Adventist Health, and its affiliated hospital White Memorial Medical Center. They are accused of violatins of the False Claims Act.

According to the settlement terms, $11.5 million of the settlement will be paid to the U.S. Government and the remaining $2.6 million will be paid to California’s Department of Health Care Services. The whistleblowers in this case will collectively receive $2,839,219 of the recovery. 

The initial whistleblower lawsuit was filed June 2008.  The government's complaint alleged Adventist Health improperly compensated physicians who referred patients to the White Memorial facility by transferring assets, including medical and non-medical supplies and inventory, at less than fair market value.  Additionally, Defendant White Memorial paid referring physicians compensation that the United States contended was above fair market value to provide teaching services at its family practice residency program.  The United States alleged that these payments violated the Anti-Kickback Act and Stark Statute, and by extension, the False Claims Act.   Approximately $11.5 million of the settlement will be paid to the U.S. Government, most of which will benefit the Medicare Trust Fund.   The remaining $2.6 million will be paid to California’s Department of Health Care Services.      

A settlement has been reached in a whistleblower class action lawsuit brought against Dialysis Corporation of America (DCA), acquired by U.S. Renal Care in June 2010,  who is accused of  submitting false claims to the Medicare program for more Epogen than was actually administered to dialysis patients at DCA facilities.

The whistleblower will receive $1,314,000 as part of the government's settlement.

Epogen is an intravenous medication that is used to treat anemia, a common condition afflicting patients with end-stage renal disease.  Epogen vials contain a small amount of medication in excess of the labeled amount, known as “overfill,” to compensate for medication that may remain in the vial after extraction and in the syringe upon administration.  

Based upon the originally filed whistleblower lawsuit from 2008, the United States contends that from January 2004 through May 2011, DCA billed for 10-11% overfill whenever it administered Epogen.  However, because of the types of syringes DCA used, the United States alleges that DCA was not able to withdraw and administer 10-11% overfill every time it administered Epogen to patients, and thus submitted false claims to Medicare that overstated the amount of Epogen that it was actually providing.

A settlement has been reached in a whistleblower class action lawsuit brought against Fifty-five hospitals located throughout twenty-one states. They are accused of submitting false claims to Medicare for kyphoplasty procedures.

The settling facilities, and the amounts they have agreed to pay, include the following: 

• Atrium Medical Center, Middletown, OH, has agreed to pay $4,232,992.50.
• Altru Health System, Grand Forks, ND, has agreed to pay $1,492,690.
• Cedars Sinai Medical Center, Los Angeles, CA, has agreed to pay $1,485,846.
• Des Peres Hospital, St. Louis, MO, has agreed to pay $900,000.
• Mount Sinai Medical Center, Miami, FL, has agreed to pay $1,846,194.00. 
• New England Baptist Hospital, Boston, MA, has agreed to pay $374,814.48. 
• St. Anne’s Hospital, Fall River, MA, has agreed to pay $552,745.
• The Queen’s Medical Center, Honolulu, HI, has agreed to pay $1,055,249.57.
• Trover Health System, Madisonville, KY, has agreed to pay $1,162,837.
• Wayne Memorial Hospital, Goldsboro, NC, has agreed to pay $1,250,000.  
• Twenty-three hospitals affiliated with HCA Inc., Nashville, TN, have agreed to pay a total of $7,145,842.72.  These include:  Aventura Hospital & Medical Center (Aventura, FL); Capital Regional Medical Center (Tallahassee, FL); Coliseum Medical Center (Macon, GA); Coliseum Northside Hospital (Macon, GA); Conroe Regional Medical Center (Conroe, TX); Denton Regional Medical Center (Denton, TX); Doctors Hospital of Sarasota (Sarasota, FL); Edmond Regional Medical Center (Edmond, OK); Fawcett Memorial Hospital (Port Charlotte, FL); Fort Walton Beach Medical Center (Fort Walton Beach, FL); Garden Park Medical Center (Gulf Port, MS); JFK Medical Center (Atlantis, FL); Los Robles Regional Medical Center (Thousand Oaks, CA); North Florida Regional Medical Center (Gainesville, FL); Northlake Medical Center (Tucker, GA); Oklahoma University Medical Center (Oklahoma City, OK);  Palmyra Medical Center (Albany, GA); Redmond Regional Medical Center (Rome, GA); Southwest Florida Regional Medical Center (Fort Myers, FL); St. Lucie Medical Center (Port Saint Lucie, FL); Summit Medical Center (Hermitage, TN); Sunrise Hospital & Medical Center (Las Vegas, NV); and Wesley Medical Center (Wichita, KS). 
• Six hospitals affiliated with Lifepoint Hospitals, Inc., Brentwood, TN, have agreed to pay a total of $2,522,502.69.  These include:  Andalusia Regional Hospital (Andalusia, AL); Jackson Purchase Medical Center (Mayfield, KY); Lake Cumberland Regional Hospital (Somerset, KY); Minden Medical Center (Minden, LA); Russellville Hospital (Russellville, AL); and Western Plains Medical Complex (Dodge City, KS).      
• Five hospitals affiliated with Trinity Health, Livonia, MI, have agreed to pay a total of $3,910,017.53.  These include:  Mercy Medical Center – Dubuque (Dubuque, IA); Mercy Medical Center - Sioux City (Sioux City, IA); St. Joseph Mercy Hospital (Pontiac, MI); Mercy Health Partners (Muskegon, MI); and Mount Carmel New Albany Surgical Hospital (New Albany, OH).   
• Four hospitals affiliated with Morton Plant Mease BayCare Health System, Clearwater, FL, have agreed to pay a total of $2,378,325.45.  These include:  Morton Plant Hospital (Clearwater, FL); Morton Plant North Bay Hospital (New Port Richey, FL); Mease Dunedin Hospital (Dunedin, FL); and Mease Countryside Hospital (Safety Harbor, FL).     
• Three hospitals affiliated with Baptist Memorial Health Care Corporation, Memphis, TN, have agreed to pay a total of $691,168.  These include:  Baptist Memorial Hospital-Golden Triangle (North Columbus, MS); Baptist Memorial Hospital-Collierville (Collierville, TN); and Baptist Memorial Hospital-Memphis (Memphis, TN).    
• Two hospitals affiliated with Covenant Health, Knoxville, TN, have agreed to pay a total of $1,845,641.74.  These include Parkwest Medical Center (Knoxville, TN) and Methodist Medical Center of Oak Ridge (Oak Ridge, TN). 
• Two Hospitals affiliated with Bayhealth Medical Center, Newark, DE, have agreed to pay a total of $1,115,306.37.  These include Bayhealth Kent General Hospital (Dover, DE) and Bayhealth Milford Memorial Hospital (Milford, DE).   

The whistleblowers will receive a total of approximately $5.5 million from the settlements.

The settlements resolve government allegations stemming from a whistleblower lawsuit that alleged that the settling hospitals frequently billed Medicare for kyphoplasty procedures on a more costly inpatient basis, rather than an outpatient basis, in order to increase their Medicare billings.   Kyphoplasty is a minimally-invasive procedure used to treat certain spinal fractures that often are due to osteoporosis.

A settlement has been reached in a whistleblower class action lawsuit brought against Imagimed LLC, William B. Wolf III and Dr. Timothy J. Greenan, and the company’s former chief radiologist, Dr. Steven Winter. They are accused of submitting false claims to federal healthcare programs for magnetic resonance imaging (MRI) services.

The whistleblower in this case will receive $565,500.

The federal government's case alleged that, from July 1, 2001, through April 23, 2008, Imagimed, Greenan, Wolf and Winter submitted claims to Medicare, Medicaid and TRICARE for MRI scans performed with a contrast dye without the direct supervision of a qualified physician.  Since a potential adverse side effect of contrast dye is anaphylactic shock, federal regulations require that a physician supervise the administration of contrast dye when it is used for an MRI.  Also, allegedly, from July 1, 2005, to April 23, 2008, Imagimed, Greenan, Wolf and Winter submitted claims for services referred to Imagimed by physicians with whom Imagimed had improper financial relationships.  In exchange for these referrals, Imagimed entered into sham on-call arrangements, provided pre-authorization services without charge and provided various gifts to certain referring physicians, in violation of the Stark Law and the Anti-Kickback Statute.

A settlement has been reached in a whistleblower class action lawsuit brought against Boston Scientific Corp and its subsidiaries, Guidant LLC, Guidant Sales LLC and Cardiac Pacemakers Inc.  They are accused of knowingly selling defective heart devices to health care facilities that in turn implanted the devices into Medicare patients.

The whistleblower in this case will receive a $2.25 million share of the government's recovery.

The whistleblower filed this action in January 2011.  The government's allegations against Guidant were that two lines of implantable cardiac devices manufactured and sold by Guidant, known as the Prizm 2 and the Renewal 1 and 2, contained a defect that resulted in “arcing.”  Arcing occurs when the device detects the irregular heartbeat and delivers a shock, but instead of the current traveling to the heart, the current “arcs” back to the device itself.  This causes the device to short circuit, rendering the device ineffective.

The government alleged that Guidant learned as early as April 2002 that the Prizm was defective, and as early as November 2003 that the Renewal 1 and 2 were similarly defective.  Nevertheless, although Guidant took corrective action to fix the defects, the company continued to sell its remaining stock of the old, defective versions of the devices.  The government alleged further that, as Guidant learned about the cause of the defect, it took steps to hide the problem from patients, doctors and the Food and Drug Administration (FDA).  Instead of disclosing the problem, Guidant issued a misleading communication to doctors regarding the nature of the defect and did not fully disclose the problem with the devices to doctors and the FDA until May 2005, after first being contacted by a New York Times reporter.  Subsequently, the company recalled the devices after a front-page article about the defects appeared in The New York Times.

A settlement has been reached in a whistleblower class action lawsuit brought against Vantage Oncology LLC who is accused of submittung false claims to Medicare for radiation oncology services performed at its Illinois centers from 2007 through June 2012.

The whistleblower in this case will receive $354,450 of the government's recovery.

The case was filed by a whistleblower in November 2010.  The government's complaint alleged that Vantage double billed and overbilled Medicare for certain procedures, billed for services that lacked supporting documentation and improperly billed for radiation treatment provided to patients without proper physician supervision.

A settlement has been reached in a whistleblower class action lawsuit brought against Abbott Laboratories who is accused of paying kickbacks to induce doctors to implant the company’s carotid, biliary and peripheral vascular products.

The two whistleblowers that filed the original complaint will receive a total payment of more than $1 million. 

The first of the whistleblower cases was filed in September 2009.  The government's complaint alleged that Abbott knowingly paid prominent physicians for teaching assignments, speaking engagements and conferences with the expectation that these physicians would arrange for the hospitals with which they were affiliated to purchase Abbott’s carotid, biliary and peripheral vascular products.  As a result, the United States alleged Abbott violated the Anti-Kickback Act and caused the submission of false claims to Medicare for the procedures in which these Abbott products were used.

A settlement has been reached in a whistleblower class action lawsuit brought against St. James Healthcare (St. James), a hospital located in Butte, MT, and its parent company, Sisters of Charity of Leavenworth Health System (Sisters of Charity), a health care organization based in Denver, CO.  Both are accused of improperly providing financial benefits to physicians and physician groups that made referrals to the hospital.

The settlement announced today resolves allegations that St. James and Sisters of Charity provided various improper financial incentives to physicians and physician groups that were involved in a joint venture with St. James to own and operate a medical office building on the St. James campus.  These incentives included a payment to the joint venture that increased the share values for the physicians and physician groups in the joint venture and resulted in below fair market value lease rates for the physicians renting space in the medical office building.  Additional incentives provided by St. James and Sisters of Charity included below fair market value lease rates for the land upon which the medical office building was constructed and other below fair market value arrangements related to shared facilities, use and maintenance.  These issues were disclosed by St. James and Sisters of Charity to the government.

A settlement has been reached in a whistleblower class action lawsuit brought against RehabCare Group Inc, RehabCare Group East Inc and Rehab Systems of Missouri and management company Health Systems Inc.  They are accused of engaging in a kickback scheme related to the referral of nursing home business.

The whistleblower will receive $5.7 million as its share of the recovery in this case.

The initial whistleblower case was filed in May 2012.  The government's complaint alleges that between March 1, 2006, and Dec. 31, 2011, RehabCare allegedly arranged with Rehab Systems of Missouri to obtain Rehab Systems of Missouri ’s contracts to provide therapy to patients residing in 60 nursing homes controlled by Rehab Systemsmajority-owner James Lincoln. In exchange for this stream of referrals, RehabCare allegedly paid Rehab Systems a $400,000 to $600,000 upfront payment and allowed Rehab Systems to retain a percentage of the revenue generated by each referral.