In February 2004, Cheryl Burns and Janine Slaughter filed a qui tam suit under the False Claims Act. The False Claims Act allows citizens to sue on behalf of the United States when false claims that are knowingly submitted to government programs. The United States can recover triple damages and civil penalties, and the whistleblowers receive a percentage of the recovery.
Ms. Burns and Ms. Slaughter had both worked for the Blood and Marrow Transplant Group of Georgia (“BMTGG”), Ms. Burns as a CEO and Ms. Slaughter as a billing/office manager. The women alleged that BMTGG and Northside Hospital had violated the Social Security Act provisions known as the Stark Law. Under the Stark law, a physician cannot make a referral to an entity for the furnishing of certain health services, if that physician has a financial relationship with the entity that does not meet one of the law’s exceptions.
Ms. Burns and Ms. Slaughter alleged that BMTGA, in affiliation with Northside Hospital, operates a clinical transplant program for stem cell transplants and cancer treatment. The transplant physicians who own BMTGA also own ABS (formerly known as Atlanta Blood Center), which is a clinical laboratory that provides services and blood products to Northside Hospital.
According to the allegations, Northside provided employees to the physicians, free of charge, for the benefit of the physicians’ private practice. They also alleged that Northside Hospital had purchased platelet products from Atlanta Blood Center at an inflated price. The Government added a claim that Northside was paying medical directorship fees to the transplant physicians that exceeded fair market value. According to the allegations, all of these charges then were passed through to the government through Medicare claims made by the hospital.
The United States agreed to dismiss the lawsuit. In exchange, the three entities agreed to pay $6,378,448.00, and to execute Certification of Compliance Agreements with the Department of Health and Human Services, Office of Inspector General. Under the Compliance Agreements, the hospital and physicians’ group are required to
adhere to certain policies and procedures to ensure compliance with applicable statutes
and regulations.
Northside Hospital in Atlanta agreed to pay approximately $5.72 million, and BMTGA and Atlanta Blood Services (ABS), agreed to pay $650,000.
Ms. Burns and Ms. Slaughter jointly received $1.2 million as their share of the recovery under the settlement.
Assistant United States Attorney Mina Rhee handled the case for the United
States.
