Meridian Surgical Partners, a healthcare company specializing in managing ambulatory surgical centers (ASCs), has agreed to pay $5.12 million to settle a False Claims Act lawsuit brought by a whistleblower.
The FCA whistleblower provisions permit private citizens known as "relators" to bring qui tam lawsuits on behalf of the United States and receive a portion of proceeds of any settlement or judgment.
Thomas Reed Simmons sued Meridian in the U.S. District Court for the Middle District of Tennessee under the whistleblower provisions of the False Claims Act for allegedly engaging in an illegal kickback scheme that defrauded taxpayers out of millions of dollars in Medicare payments.
Michael D. Palmer, JD, senior litigation counsel at Sanford Heisler in New York City, said, "This settlement reaffirms that relators who choose to pursue their claims after the government has declined to intervene can achieve successful results. While we were fully prepared to take this case through trial, we are pleased with the recovery obtained on behalf of Mr. Simmons and the government."
Simmons worked as a business office manager for an ASC that was managed and principally owned by Meridian. In his complaint, Simmons alleged that that Meridian offered and paid remuneration to physicians of the ASC to secure patient referrals for services paid for by Medicare, in violation of the federal Anti-Kickback Statute and the False Claims Act. Simmons accused Meridian of paying more than fair market value for a majority ownership of the ASC and rewarding physicians for referring patients by offering them minority ownership stakes.
Simmons initiated the case on behalf of the U.S. government in May 2011 while he was still employed by Meridian. After the government declined to intervene, Simmons and his counsel Jonathan Kroner, JD, MBA, of the Jonathan Kroner Law Office in Miami Beach, FL, decided to litigate the case on the government’s behalf. The federal government permits whistleblowers to take cases to court on behalf of the public. Reed and Kroner brought Sanford Heisler into the case to act as lead litigation counsel. The case was scheduled to go to trial starting Sept. 23, 2014.
Ross Brooks, JD, co-chair of Sanford Heisler’s whistleblower practice, said, "This is one of very few cases to allege successfully that payments of ownership interests in an ASC to physicians in exchange for patient referrals are kickbacks that violate the False Claims Act. Those seeking to disguise illegal kickbacks as legitimate business transactions or standard industry practice should take heed that the government will be scrutinizing more of these arrangements in future qui tam investigations."
Your facility’s managers and members of your boards should stay refreshed on state and federal regulations, urges Steve Earnhart, MS, president and CEO of Earnhart & Associates, an Austin-based healthcare consulting firm specializing in all aspects of outpatient services. "I preach this to our clients repeatedly: not to dip into the grey zone of these regulations," Earnhart says. "Not only is it illegal and unethical, but it undermines creditability for all of the industry."
