Montana Hospitals Resolve False Claims Act Allegations for $3.95 Million

May 24, 2013 — In the battle against Medicare fraud, the U.S. Justice Department returns millions of dollars every year to American taxpayers through the use of the False Claims Act. Under the qui tam provisions of the Act, health care employees who learn about fraudulent Medicare schemes are empowered file a whistleblower lawsuit against those involved for the benefit of the government. Tipsters retain a share of the amount the government collects. Although any individual with knowledge of fraud is authorized to bring a claim, insider employees are more likely to spot fraud first and put a stop to it with a False Claims Act lawsuit.

Montana Hospitals Settle Alleged Stark Act Violations

Two Montana hospitals have settled False Claims Act allegations for the combined amount of $3.95 million, plus interest. The U.S. Justice Department alleged that Holy Rosary Healthcare in Miles City, Montana and St. Vincent Healthcare in Billings had violated the False Claims Act and the Stark Law by making improper payments to doctors who referred patients to the hospitals.

Under the Stark Law, a hospital is generally prohibited from billing Medicare for services to patients referred by doctors with a financial interest in or relationship with the hospital. In particular, the law forbids Medicare reimbursement where a hospital compensates a doctor based on the number of the doctor’s patient referrals to the hospital or the income generated by a doctor’s referrals.

In Montana, the hospitals allegedly paid incentives to several doctors based on the value of their patient referrals to the hospitals. The hospitals self-reported the alleged violations.

Tipsters in False Claims Act Suits Likely to be Health Care Insiders

In this Montana case, the hospitals themselves reported the allegations of their False Claims Act and Stark law violations. Frequently, however, allegations of Medicare fraud come to light when concerned insiders take action. It takes a lot of courage to notify the government about an employer’s misconduct. Informants who collaborate with the government should learn their own legal rights before they notify the government. With law offices across the country, Waters & Kraus provides whistleblowers with the experienced legal counsel they deserve. Contact us by email or call our qui tam attorneys at 855.784.0268 to discuss how we can protect and maximize your interests.

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