Part II: 9 Qui Tam Lawsuits You Should Know About

Earlier, we introduced you to some record-breaking qui tam lawsuits exposing rampant waste of taxpayer money and resources by healthcare providers. Nearly every entry on the list pertained to healthcare fraud, and this second entry in the two-part series is certainly no exception. As we continue to explore some of the top whistleblower lawsuits of 2013, keep in mind there is still one-quarter of the year remaining – and with the creative tactics employed by many of these companies, virtually anything is possible.

U.S. v. CH2M Mill Hanford Group, Inc.

This case involves fraudulent spending by Colorado-based CH2M Hanford Group, Inc., a company involved in environmental clean-up projects. According to the DOJ, CH2M engaged in the clean-up and maintenance of radioactive and hazardous waste sites belonging to the Department of Energy, during which time CH2M encouraged hourly employees to pad their time sheets and submit weekly hours in excess of those actually worked. Suspicions arose when employees “consistently refuse[d] to perform any overtime work unless that overtime was offered….in 8 hour blocks” which eventually resulted in workers accepting eight-hour overtime work and leaving well before the eight hours had ended – all while falsely claiming the full eight-hour overtime amount. All in all, this astounding fraudulent time-card scheme wound up costing American taxpayers tens of millions of dollars, resulting in a settlement with the DOJ wherein CH2M agreed to pay $18.5 million in civil and criminal penalties, as well as spend another $500,000 to impose an accountability system.

U.S. v. American Sleep Medicine

The DOJ successfully recovered $15.3 million from Florida-based American Sleep Medicine, LLC after a finding it fraudulently billed Medicaid and TRICARE, a health program for uniformed officers and their families, for diagnostic sleep tests performed by unqualified, unlicensed technicians in violation of federal regulations. More specifically, federal law requires that in order to receive reimbursement for diagnostic sleep studies like those performed to diagnose sleep apnea, the tests must be administered by an individual who is certified as a sleep test technician. In this case, tests were performed by various technicians or medical aids who did not hold the requisite credentials and, therefore, were not eligible for reimbursement through Medicaid or TRICARE. In addition to its civil and criminal penalties, American Sleep Medicine has agreed to enter a five-year corporate integrity agreement, which allows for internal and external monitoring for compliance. The whistleblower in this case took away over $2 million for his role in curtailing healthcare fraud in the sleep study industry.

U.S. v. Adventist Health System & White Memorial Center

In yet another instance of healthcare fraud, medical corporation Adventist Health System was found to be actively engaged in the practice of fraudulently offering physicians kickbacks for referring certain patients to its affiliated hospital: the White Memorial Center (which is one of the largest not-for-profit teaching hospitals in the United States). Under the Anti-Kickback Act, companies like Adventist are prohibited from offering money or benefits in exchange for referrals or services covered by government programs like Medicare or Medicaid. In this case, the DOJ uncovered evidence that White Memorial was offering physicians inflated salaries and bonuses for teaching its family practice residency in exchange for the physicians referral of patients to White Memorial. This scheme stands in stark contrast to one of the hallmark tenets of the doctor-patient relationship: the assurance that medical advice and referrals are in response to a patient’s actual needs and not related to the doctor’s interest in receiving heightened salaries, fees or bonuses. In this case, the whistleblowers are set to share just under $3 million for their willingness to put a stop to this practice.

U.S. v. Cooper Health Systems

Also in 2013, New Jersey-based Cooper Health System and Cooper University Hospital were caught offering kickbacks to cardiologists sitting on their Cooper Heart Institute Advisory Board – another violation of the Anti-Kickback Act resulting in tens of millions of taxpayer dollars lost. Fortunately, the DOJ was able to duly prosecute and recover $12.6 million from these medical groups, allowing the whistleblower to recover a sum close to $2 million for his role in revealing unlawful kickbacks and billing procedures. More specifically, Cooper was offering doctors $18,000 per year to sit on the Board, provided each member attended four meetings per year – which were nothing more than gatherings designed to incentivize and encourage cardiologists to refer all patients to the Cooper Health Systems network. One cardiologist recognized the inherent problems with this scheme and has received close to $2 million for blowing the whistle.

U.S. v. Hospice of Arizona