Northside Hospital and other defendants pay over $ 6 million to settle Medicare Fraud claims

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.  

Piedmont Hospital agrees to pay over $3 million to resolve a False Claims Act case

In July 2003, Patricia J. Quinnelly, filed a “whistleblower,” or “qui tam” suit against Piedmont Hospital.  Quinnelly was a vascular technologist in Piedmont’s F. Levering Neely Vascular Laboratory from 2001 through 2004. 

Ms. Quinnelly filed suit under the False Claims Act, 29 U.S.C. § 3729 et seq.  That act allows the United States to recover triple damages and civil penalties when false claims are knowingly submitted to government programs. 

Quinnelly alleged that “Piedmont Hospital had submitted claims for a physician’s interpretation of some vascular laboratory tests when the physician interpretation, in fact, had not been done.  Specifically, Quinnelly alleged that one of the laboratory’s physicians routinely failed to conduct an independent review of the vascular test data, and instead simply signed off on the technicians’ interpretations and proposed diagnoses.” http://www.usdoj.gov/usao/gan/press/2006/06-09-06.pdf  

During the investigation of Ms. Quinnelly’s claims, the government discovered that Piedmont Hospital also had failed to execute contractual agreements with the physicians performing services at the vascular laboratory.  The Stark law, 42 U.S.C. §1395, a Social Security Act provision, regulates physicians’ referrals to entities in which they have a financial interest. 

The United States agreed to dismiss the lawsuit in exchange for $3,039,388.00 

“and Piedmont’s acceptance of a Certification of Compliance Agreement entered into with the Department of Health and Human Services, Office of Inspector General.  The 

Compliance Agreement requires Piedmont to adhere to certain policies and procedures to ensure compliance with applicable statutes and regulations that govern the use of federal health care funds.”   http://www.usdoj.gov/usao/gan/press/2006/06-09-06.pdf

Quinnelly received $354,390.00 as her share of the recovery under the settlement. 

Clark Atlanta University pays $5 million to settle whistleblower suit

Clark Atlanta University has agreed to pay $5 million to settle a  federal 

whistleblower, or qui tam, suit, brought by Dr. August Curley.

“The lawsuit alleged that Clark Atlanta, acting as manager of a Consortium that included itself and sixteen other universities, received and retained approximately $24 million under a Cooperative Agreement that Clark Atlanta had with the Department of Energy.” http://www.usdoj.gov/usao/gan/press/2006/04-14-06.pdf   Dr. Curley was hired by Clark Atlanta as Program Manager for the Consortium in 1995.

 

“The Consortium was created in 1990 to meet the Department of Energy’s anticipated needs for a workforce of scientists and engineers trained in environmental technology, environmental restoration, environmental health and waste management.  The complaint alleged that under the terms of the Cooperative Agreement, Clark Atlanta was to use the funds for very specific purposes designed to further the goal of training a minority workforce in environmental sciences, but that Clark Atlanta did not in fact use the funds for those purposes.” http://www.usdoj.gov/usao/gan/press/2006/04-14-06.pdf

Clark Atlanta also agreed to enter into a Compliance Agreement designed to ensure that future federal funds will be managed appropriately. 

Dr. Curley received 22% of the $5 million, or $1.1 million.  “The remaining $3.9 million, plus interest, will be paid to the United States in installments over five years.” http://www.usdoj.gov/usao/gan/press/2006/04-14-06.pdf

 

Life Care Centers group pays $2.5 million to resolve whistleblower suit

Life Care Centers of America, Inc. (LCCA), the operator of a skilled nursing facility located in Lawrenceville, Georgia known as Life Care Center of Lawrenceville (Lawrenceville), along with Gwinnett Operations, a TN LLC, successor to Gwinnett Medical Investors Limited Partnership (GO), Developers Investment Company, Inc. (DIC) and Forrest L. Preston, the owners of Lawrenceville, agreed to pay $2.5 million to resolve multiple allegations that Lawrenceville had violated the federal False Claims Act by billing for services that either were not provided or were worthless to the Lawrenceville residents.

In November 2002, five whistleblowers, who were family members of Lawrenceville residents, filed a qui tam suit.  They alleged a systemic failure in the care rendered to residents at Lawrenceville.  Lawrenceville had failed to provide appropriate nursing care, resulting in the premature deaths of several residents, according to the allegations.  “The whistleblowers' complaint alleged that the failure of care was the result of severe understaffing, inadequate staff training, high staff turnover, an ineffective medical director, poor nursing documentation, and insufficient budgetary allowances.” http://www.usdoj.gov/usao/gan/press/2005/12-22-2005.html

The United States and the State of Georgia have agreed to dismiss the lawsuit in exchange for a total payment of $2.5 million, with the United States receiving $1,092,000 for damages sustained by the Medicare program and $604,800 for the federal share of the damages sustained by the Medicaid program. The State of Georgia received $403,200 for the damages sustained by the State of Georgia in connection with its funding of the Medicaid program. 

Three of the whistleblowers remained parties to the suit at the conclusion of the case, and they received a total of $400,000. 

LCCA and Lawrenceville also agreed to enter into a Corporate Integrity Agreement (CIA), requiring Lawrenceville to continue to implement certain policies and procedures to ensure compliance with applicable statutes and regulations governing patient care.  The Agreement also provided for the appointment of an independent monitor who will oversee operations at Lawrenceville for up to five years to verify that its policies and procedures are working effectively and that patients receive appropriate care.  LCCA also voluntarily agreed to apply the policies and procedures implemented for Lawrenceville to LCCA's other facilities across the country.

Peter D. Keisler, Assistant Attorney General for the Civil Division, said that the settlement was " the largest recovery against a single skilled nursing facility under the False Claims Act based on a failure of care case to date." http://www.usdoj.gov/usao/gan/press/2005/12-22-2005.html

United States Attorney David E. Nahmias said, "This case demonstrates that the government will not tolerate a nursing home's failure to provide adequate care to the elderly, our most vulnerable citizens; and that the government will continue to ensure that public funds expended on behalf of nursing home residents are used appropriately to provide them with adequate care and services. While we always expect to recover the public funds improperly expended, in these nursing home cases, our primary goal is to ensure good patient care. Life Care's willingness to voluntarily apply the policies and procedures implemented at Lawrenceville to its other facilities helps further this goal." http://www.usdoj.gov/usao/gan/press/2005/12-22-2005.html

Georgia Attorney General Thurbert Baker said, "Today's settlement reaffirms the commitment of both the State of Georgia and the federal government to pursue allegations of improper care provided to Georgia's elder citizens. In failing to provide sufficient care for these nursing facility residents, Life Care placed at risk the very residents who had been entrusted to its care. This settlement sends a clear message that taking shortcuts to improve the financial bottom line in the medical arena will have legal consequences."  http://www.usdoj.gov/usao/gan/press/2005/12-22-2005.html