Health network pays $345 million for False Claims Act violations

On Behalf of | Feb 5, 2024 | Whistle-blower Claims

An Indiana health network recently agreed to pay $345 million to resolve accusations of a Medicare fraud scheme.

According to the U.S. Department of Justice, Community Health Network, based in Indianapolis, knowingly submitted claims to Medicare that were referred in violation of the False Claims Act and the Stark law.

The Stark law

The Stark law forbids a hospital from billing for certain services that are referred by physicians that the hospital has a financial relationship with. The hospital may only submit claims for these services if the physician’s compensation is relatively equal to fair market value and not based on the number of referrals to the hospital.

In the case above, the compensation Community Health Network allegedly paid to its physicians was above fair market value. Additionally, bonuses were apparently awarded to physicians based on their referral volume.

The complaint went on to state that Community Health Network then submitted claims to Medicare for services based on these illegal referrals.

The unlawful scheme is alleged to have begun in 2008 or 2009. According to the complaint, a valuation firm was hired to analyze the compensation being paid to the physicians.

However, Community Health Network was accused of intentionally providing the valuation firm with false compensation figures for the physicians and ignoring warnings by the firm that inflating the physicians’ salaries was illegal.

In addition to paying the $345 million to settle the lawsuit, Community Health Network will sign a five-year corporate integrity agreement with the U.S. Department of Health and Human Services Office of the Inspector General.

The purpose of the Stark law is to protect Medicare patients by ensuring that the care they receive from their doctor is based on their medical needs and not on their doctor receiving more money.

The False Claims Act

This type of lawsuit alleges a violation of the False Claims Act, which prohibits submitting false claims or using false records to defraud the federal government.

As a private citizen, you could find yourself in a situation where you are aware that a person or business is committing this type of fraud and wonder what you can do about it.

You can file a lawsuit on behalf of the federal government. These lawsuits are called qui tam actions but you may hear them referred to as whistleblower lawsuits.

The medical and healthcare industry are often the subject of whistleblower lawsuits. Previous whistleblower lawsuits have involved submitting false claims, billing for unnecessary tests, double billing or HIPAA violations.

Your role as a whistleblower

Whistleblower lawsuits can be complex, but those who defraud the government should be held accountable.

If you believe you have a valid whistleblower claim, it is best to talk with the attorneys at Alan C. Olson & Associates, who are experienced in this area to make sure your rights and confidentiality are protected and you take the proper next steps.


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