Hospital Settles Medicare Fraud Claims Based on Stark Law Violations
Halifax Hospital Medical Center and an affiliate will pay $85 million to settle claims that they submitted false claims to Medicare for services that violated the physician self-referral provisions of the Stark Law.
The Stark Law prohibits hospitals from billing Medicare for certain services referred by physicians who have a financial relationship with the hospital. The financial relationship may take the form of salaries, benefits, consulting contracts, or below-market office space.
The whistleblower complaint in this case alleged that contracts between Halifax and six medical oncologists violated the prohibition on physician self-referrals in the Stark Law. Specifically, the contracts provided an incentive bonus based on the value of prescription drugs and tests that the oncologists ordered and the hospital then billed to Medicare.
The complaint also alleged that the hospital violated the Stark Law by paying three neurosurgeons who referred patients to the hospital more than the fair market value of their services.
The settlement resolves a whistleblower lawsuit brought by a former hospital employee under the qui tam or whistleblower provisions of the False Claims Act. The qui tam provisions allow an individual citizen to file a lawsuit “under seal” (in secret) on behalf of the government and share in the amount the government recovers. After investigating the claims, the government may choose to take over the lawsuit or allow the whistleblower to proceed on its behalf.
The whistleblower in this case, Elin Baklid-Kunz, will receive a $20.8 million reward for helping the government uncover the fraud and prove the allegations.
Qui tam or whistleblower lawsuits are different from ordinary lawsuits in several respects. The procedures for filing the lawsuit and disclosing evidence to the government must be followed correctly or the case will be dismissed. In addition, the whistleblower must produce evidence of the false claims, not merely allegations, at the very beginning of the lawsuit.
If you have evidence that a hospital is violating the Stark Law or making other types of false claims to Medicare or Medicaid, then you should consult with an experienced whistleblower lawyer immediately to protect your rights. You may be entitled to a substantial reward and other whistleblower protections if you prepare your case properly.
To arrange a free and confidential consultation with an experienced whistleblower attorney, call John Howley, Esq. at (212) 601-2728 or click here to reach our office via email.
John Howley, Esq.
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