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July 23, 2014 Healthcare Fraud

Florida-Based Halifax Health Settles Second Half of $73 Million Overbilling Case

Earlier this year, Florida-based health services company Halifax Health paid $85 million to settle allegations that it was engaged in a years-long kickback scheme in violation of the federal Stark Law. The settlement was one of the largest reported in Florida history; however, it did not work to settle the matter entirely. Following the historic Stark Law settlement, the company was still facing liability under the False Claims Act for overbilling Medicare to the tune of $73 million– and the courageous whistleblower was not backing down. Reportedly, Halifax has agreed to settle the case for $1 million– presumably to avoid the public dissemination of possibly disparaging information about the company’s engagement in fraudulent activity against federal and Florida taxpayers.

Background of Case Against Halifax

At the time of its earlier settlement, Halifax was facing up to $1 billion in damages for its involvement in a kickback scheme with several oncologists. That was known as the “first half’ of the case. The “second half,” filed by former compliance director Elin Baklid-Kunz under the False Claims Act, alleges that Halifax worked to increase profit margins by “recklessly admitting patients” to its facility for expensive and allegedly unnecessary inpatient procedures at the cost of federal healthcare programs. According to her complaint, the relator asserts that she brought these issues to the attention of hospital executives, who turned a blind eye to the overbilling procedures.

Allegedly, Halifax admitted more than 21,000 patients for inpatient services that were likely not necessary– resulting in possible liability under the False Claims Act topping $73 million. This scheme continued from 2002 through 2013.

Alarmingly, the relator’s case was almost derailed earlier this year when a Florida District Court judge ruled that Halifax’s overbilling did not necessarily amount to “false claims.” The judge relied on the notion that medical records and evidence were insufficient to conclude definitively that patients admitted for inpatient services were not in need of such services. It would therefore be too difficult to discern whether the services were truly medically necessary or not based on the record. Nonetheless, Halifax agreed to a $1 million settlement– which will be made official upon the approval by the District Court judge.

The federal government had until July 21st to review the settlement and raise any objections.

Report Healthcare Fraud Immediately

Halifax Hospital runs the risk of being booted from the Medicare program entirely. Its widespread and systemic practice of allegedly engaging in overbilling and kickback schemes has exposed it to close to $1 billion in possible liability under the False Claims Act. Nonetheless, this type of healthcare fraud continues to run rampant in the healthcare industry, and dozens of new cases are unveiled every month involving fraud against Medicare and Medicaid.

If you are aware of possible healthcare fraud and would like to report your findings under the False Claims Act, a whistleblower attorney can help you properly plead and argue your case. For more information, contact Berger Montague today.