On May 31, the Department of Justice announced that Vangaurd Health Systems (doing business as The Detroit Medical Center Inc. (DMC)) and Tenet Healthcare Corporation (Tenet), has agreed to pay $29.7 million to resolve allegations of False Claims Act (FCA) violations. The government’s accusations describe the healthcare providers giving kickbacks in exchange for referrals, a potential violation of the Anti-Kickback Statute (AKS).
Dr. Jay Meythaler, a former employee of Wayne State University Medical School, which is affiliated with DMC brought the alleged violations to the government’s attention when he blew the whistle. Dr. Meythaler filed a civil suit under the qui tam provision of the FCA. Qui tam claims enable private citizens to file lawsuits on behalf of the government if they know of an individual or company defrauding the government. Qui tam whistleblowers are eligible to receive between 15 and 30% of the government’s recovery. Dr. Meythaler will receive $5.2 million as his share in the case.
The government emphasized its interest in catching and preventing inappropriate deals at hospitals like the kind alleged in this case. “The Justice Department will pursue improper arrangements that have the potential to compromise physicians’ medical judgment,” said Deputy Assistant Attorney General Michael D. Granston of the Justice Department’s Civil Division. “Physicians should evaluate where to send patients for medical services based on the quality of care the patients will receive, not the financial benefits that the physicians will reap.”
According to the Department of Justice press release “the AKS prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by Medicare and other federally funded programs. The statute is intended to ensure that medical providers’ judgments are not compromised by improper financial incentives and are instead based on the best interests of their patients.”
“Paying and accepting kickbacks encourages providers to put personal financial gain before the needs of their patients,” said Special Agent in Charge Mario Pinto of the Department of Health and Human Services Office of Inspector General (HHS-OIG). “As this case demonstrates, those who enter into such improper arrangements and put the safety of their patients at risk will be held accountable.”
On June 1, the Supreme Court issued an unanimous ruling in a landmark False Claims Act case which whistleblower advocates say will help ensure the future efficacy of the law in fighting fraud.