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Hospital Fraud

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Catch of the Week: University of Miami to Pay $22 Million to Resolve Allegations of Lab Test Fraud

Posted  05/14/21
By Leah Judge
University of Miami logo
The University of Miami will pay $22 million to resolve three False Claims Act lawsuits, the first of which was filed in 2013.  The government alleged that UM, which operates a medical school out of Jackson Memorial Hospital and an extensive health system spanning four south Florida counties, fraudulently billed government health care programs to boost declining revenues.  Jackson Memorial will separately pay $1.1...

May 10, 2021

The University of Miami, which operates multiple hospitals and other healthcare facilities, will pay $22 million to resolve claims arising from allegedly fraudulent billing submitted to federal healthcare programs for laboratory services.  The university was alleged to have billed certain laboratory tests as having been provided at hospital facilities instead of at physician offices, without satisfying the requirements for that more costly hospital facility billing, including notice requirements.  In addition, the university was alleged to have performed and billed for a pre-set panel of tests for all kidney transplant patients, although not all included tests were medically necessary.  Finally, the university and Jackson Memorial Hospital, which jointly operated the kidney transplant program, were alleged to have violated related party restrictions by billing for pre-transplant laboratory tests ordered by JMH from the university, and JMH will pay an additional $1.1 million to settle these allegations.  The settlement resolves claims made in three separate qui tam lawsuits; the whistleblower's share has not yet been determined.  DOJ; USAO SD FL

April 23, 2021

Bobby Rouse, a former executive with Continuum Healthcare LLC, which owned Houston hospital Westbury Community Hospital as well as area mental health centers, was sentenced to ten years in prison following his guilty plea on charges arising from an unlawful kickback scheme.  At the direction of Rouse and co-conspirators, Continuum paid kickbacks for the referral of patients to partial hospitalization programs at Continuum facilities, many of whom did not qualify for PHP services.  In total, Continuum billed Medicare approximately $189 million for fraudulent PHP services, and Medicaid paid approximately $66 million on those clams. Fourteen individuals have been charged for the fraud.  USAO SD TX

March 5, 2021

A substance abuse treatment facility and two inpatient psychiatric hospitals in Ohio, along with their corporate parent, have agreed to pay $10.25 million to resolve claims under the Anti-Kickback Statute and False Claims Act.  According to DOJ, between 2013 and 2019, The Woods at Parkside, Cambridge Behavioral Hospital, and Ridgeview Behavioral Hospital—all owned by Florida-based Oglethorpe Inc.—allegedly provided improper inducements in the form of free long-distance transportation in order to entice patients to seek treatment at their facilities, and then submitted claims for services provided to those patients to Medicare.  The case was initiated by a former client advocate working at Cambridge, Darlene Baker.  DOJ; USAO SDOH

December 18, 2020

Texas Heart Hospital of the Southwest LLP and its affiliate THHBP Management Company LLC will pay $48 million to resolve claims brought in a whistleblower suit by two of the hospitals’ physicians alleging that the defendants violated the False Claims Act, Stark Law, and Anti-Kickback Statute.  Agreements between the hospital and its physician-owners required the doctors to have 48 patient-contacts a year in order to maintain their ownership interests.  The U.S. did not intervene in the action; the whistleblowers, Dr. Mitchell Magee and Dr. Todd Dewey, will collectively receive $13.92 million, 29% of the total settlement, as a whistleblower reward.  DOJ

November 2, 2020

Hospital system Memorial Health Services will pay a total of $31.5 million after self-disclosing that it overcharged California’s Medicaid program, Medi-Cal, for outpatient prescription drug reimbursements under the 340B Drug Pricing Program.  Memorial Health billed Medi-Cal for outpatient drugs at its usual and customary rate, rather than the lower “actual acquisition costs,” as required under the 340B Drug Pricing Program. California will receive $18.9 million of the settlement, and the federal government will receive $12.6 million.  Cal; CD Cal

September 28, 2020

Lakeway Regional Medical Center, LLC, together with affiliated parties Surgical Development Partners LLC, Surgical Development Partners of Austin Enterprises LLC, G. Edward Alexander, Frank Sossi, and John Prater, will pay $15.3 million to resolve allegations under the False Claim Act arising from the development of the hospital.  Defendants were alleged to have made numerous false statements in applying for a federally-insured mortgage loan for construction of the hospital, including overstating physician support for the hospital and understating other credit risks.  Specifically, while some investors had requested refunds, defendants delayed making those refunds in order to overstate cash on hand, and, after the mortgage funds were obtained, defendants distributed them in contravention of FHA requirements.  The hospital later defaulted on the loan. The government previously settled with other defendants.  DOJ 

September 28, 2020

Lakeway Regional Medical Center, LLC will pay $1,119,177 to resolve allegations that the hospital submitted false claims to the Medicare and Medicaid programs in the form of claims for payment for services that were based on referrals from doctors offered investment in a joint venture to purchase and then lease the hospital back to LRMC.  The government alleged that such an arrangement was unlawful under the Anti-Kickback Statute.  The case was initiated by a qui tam complaint filed by Dr. Robert Van Boven and Sharon Van Boven.  USAO WD TX

Integra Med Analytics Loses Battle to Establish New Breed of Corporate Whistleblower Outsiders, Write Mary Inman and Max Voldman in RACMonitor

Posted  06/10/20
attorney headshots of Mary Inman and Max Voldman
Constantine Cannon whistleblower attorneys Mary Inman and Max Voldman updated their earlier reporting in RAC Monitor regarding the False Claims Act case brought by Integra Med Analytics against Texas-based hospital chain Baylor Scott & White.  At the end of May, the Fifth Circuit Court of Appeals upheld a Texas district court opinion dismissing the case. As we have earlier written, Integra alleged that the...

Financial Pressures on U.S. Hospitals, Combined with New Funding, Increase Risk of Medicare and Medicaid Fraud

Posted  05/22/20
Multistory hospital building set amid trees
Hospitals are an institution we might have expected to be prepared for a healthcare crisis.  It is their job, after all, to provide emergency and intensive healthcare.  In fact, however, the COVID-19 crisis has put enormous pressures on hospitals.  With such new pressures come new risks of healthcare fraud at hospitals.

The Financial Pressures on Hospitals in the COVID-19 Crisis

Against the backdrop of heroic...
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