Adventist Health Settles California False Claims Act Allegations

May 29, 2013 — Health care providers who pay kickbacks in order to receive Medicare referrals drive up the cost of health care and waste tax dollars. To combat the practice, the Department of Justice depends on whistleblowers and the federal False Claims Act. The qui tam provisions of the False Claims Act enable health care insiders who find out about illegal health care kickbacks to sue the facilities at fault and keep a share of any recovery. Rather than ignore the illegal misconduct, many health care employees choose to notify the government.

White Memorial and Adventist Health to Pay $14.1 Million in False Claims Act Investigation

Adventist Health System/West and one of its Los Angeles hospitals, White Memorial Medical Center, have reached a $14.1 million settlement with the United States and the State of California in a False Claims Act investigation involving kickback allegations, according to the Justice Department. White Memorial’s alleged violations came to light in a qui tam lawsuit filed in California by whistleblowers who will split $2,839,219 from the settlement. The United States will be allocated $11.5 million under the agreement and California’s Department of Health Care Services will receive $2.6 million.

Based in Roseville, California, Adventist Health runs 150 clinics and 19 hospitals in California, Oregon, Washington and Hawaii. White Memorial is a teaching hospital in Los Angeles. The Justice Department alleged that the health care providers had violated the Stark Statute and Anti-Kickback Act by compensating doctors who referred patients to White Memorial with medical supplies and other goods at below fair market value. Further, White Memorial allegedly compensated referring doctors who also taught at the hospital’s family practice residency program by paying them above fair market rates for their services.

When health care providers violate the Stark Statute or the Anti-Kickback Act and then bill Medicare for their services, they also violate the False Claims Act. The laws are intended to make certain that a doctor’s best professional judgment is not clouded by improper financial incentives. The Stark Statute prevents a hospital from submitting claims to Medicare for patients referred to the facility by a doctor with whom the hospital is financially entangled. The Anti-Kickback Act forbids hospitals from paying any kind of kickback as a means to induce physicians to refer Medicare patients to the hospital, or patients covered by any other federal healthcare program.

Health Care Workers Tip Off Government to Stark Act Violations

As in this California case, False Claims Act violations involving kickbacks frequently are reported by concerned insiders. The informant may be a courageous health care practitioner or it may be someone in the accounting department. Either way, whistleblowers who collaborate with the Justice Department need to understand their rights fully before notifying the government. With whistleblower lawyers in California and across the country, Waters & Kraus provides insiders with the legal counsel and protection they deserve. Contact us by email or call our qui tam attorneys at 855.784.0268 to discuss our Medicare fraud practice.

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