An orthopedic surgeon has been awarded an $18.1 million whistleblower reward for helping the government uncover and stop a hospital’s program of paying above-market compensation to physicians in return for patient referrals.
Dr. Michael K. Drakeford, an orthopedic surgeon, was offered a contract with a hospital that would have paid him above-market compensation in return for referring his patients to the hospital. Recognizing that the contract might violate the Stark Law, the physician sought legal advice.
The Stark Law prohibits hospitals from billing Medicare or Medicaid for services that have been referred by physicians with whom the hospital has an improper financial relationship. There are many exemptions or “safe harbors” in the Stark Law to allow for legitimate compensation relationships. But the hospital may not pay more than the fair market value for the physician’s actual services, and it may not condition the payments on the volume or value of the physician’s referrals of patients to the hospital.
Instead of entering into what he believed to be an illegal contract, Dr. Drakeford started a whistleblower lawsuit under the False Claims Act. That statute allows an individual to commence a lawsuit on behalf of the government to recover for false claims to Medicare, Medicaid, and other government programs.
The lawsuit was filed “under seal” (i.e., in secret), and the physician’s evidence was provided to the government. After conducting an investigation, the government decided to take over the lawsuit. At trial, the jury found that the hospital had submitted more than 21,000 false claims to Medicare.
Under the False Claims Act, a whistleblower is entitled to a reward of between 15% and 30% of the amount actually recovered by the government. In this case, the whistleblower will receive an $18.1 million reward.
If you have evidence that a hospital is paying above-market compensation to doctors in return for patient referrals, then you should consult with an experienced whistleblower lawyer immediately to protect your rights. You may be eligible for a substantial reward and legal protections as a whistleblower.
To schedule a free and confidential consultation, call John Howley, Esq. at (212) 601-2728.