UM to Pay $22M to Settle Whistleblower Lawsuits

whistleblower

The University of Miami recently agreed to pay $22 million to settle three whistleblower lawsuits alleging violations of the False Claims Act.  The cases were first filed between 2013 and 2014.

The government alleged that UM knowingly engaged in improper billing relating to its hospital facilities. Medicare regulations allow medical systems to convert physician offices into hospital facilities as long as they satisfy certain requirements. Billing as a hospital facility results in higher costs to the federal payors and beneficiaries.

Hospital facilities are required to notify Medicare beneficiaries of those increased costs. The government alleged that UM converted multiple physician offices to hospital facilities, and then sought payment at higher rates without providing beneficiaries the required notice, even after being advised by a Medicare Administrative Contractor that its notice practices were deficient.

The government also alleged that UM billed federal healthcare programs for medically unnecessary laboratory tests for patients who received kidney transplants at the Miami Transplant Institute, a program operated by UM and Jackson Memorial Hospital.

Each time a patient checked into the transplant institute UM’s electronic ordering system triggered a pre-set “protocol” of tests to be run for the patient at UM’s laboratory. The government alleged that several tests were medically unnecessary and dictated by financial considerations rather than patient care.

Finally, the government alleged that UM caused JMH to submit inflated claims for reimbursement for pre-transplant laboratory testing conducted at the transplant institute in violation of regulations limiting the reimbursement a provider can obtain for tests performed by a related entity to that entity’s actual costs.

The government alleged that UM did so by controlling JMH’s decision to purchase pre-transplant laboratory tests from UM at inflated rates in exchange for UM’s surgeons and the Department of Surgery continuing to perform surgeries at JMH. In a separate agreement, the United States reached a $1.1 million settlement with JMH relating to this conduct.

The civil settlement resolves allegations made in three lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery.

The DOJ began investigating the alleged wrongdoing after they were first raised by the former chief operating officer of the UM Miller School of Medicine, Jonathan Lord. The case captioned United States ex rel. Jonathan Lord, M.D. v. University of Miami, Civ. No. 13-22500 (S.D. Fla.) was filed in July 2013.

Subsequent to that case, one captioned United States ex rel. Philip Chen, M.D. and Joshua Yelen v. University of Miami and Miami-Dade Public Health Trust, Civ. No. 13-24320 (S.D. Fla.), was filed by Joshua Yelen and Philip Chen, MD, both of whom worked in the Department of Pathology at the University of Miami Miller School of Medicine filed similar whistle-blower lawsuits.

The third case captioned United States ex rel. Mitchell Wallace v. University of Miami and Miami-Dade Public Health Trust, Civ. No. 14-21206 (S.D. Fla.), was filed in April 2014 by Mitchell Wallace, a former finance director at Jackson Memorial Hospital and alleged similar violations of the False Claims Act.

In addition to the settlement, UM has also agreed to enter into a corporate integrity agreement with the Department of Health and Human Services.

The case was handled jointly by the Civil Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida with assistance from HHS-OIG, the U.S. Defense Health Agency Office of the Inspector General, the U.S. Office of Personnel Management Office of the Inspector General, and the Florida Attorney General’s Office’s Medicaid Fraud Control Unit.

The Health Law Offices of Anthony C. Vitale is known for its representation of whistleblowers, as well as its ability to defend those who become the target of a whistleblower action. For more information call 305-358-4500 or send us an email to info@vitalehealthlaw.com and let’s discuss how we might be able to assist you.

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