Upper Allegheny Health System (UAHS), a health care system which operates dental clinics in Southern New York and Pennsylvania, is to pay $2.7 million dollars to resolve federal and state False Claims Act (FCA) allegations, the U.S. Department of Justice (DOJ) announced on May 26. The FCA case against UAHS was brought about by a whistleblower who should be eligible for a sizable monetary award under the FCA’s reward provisions.
According to Assistant U.S. Attorney MaryEllen Kresse, between 2010 and 2015, UAHS “submitted false claims to Medicaid for dental services that were performed using handpieces which had not been appropriately sterilized.” Health care providers are legally required to heat sterilize dental handpieces between each patient use. However, UAHS allegedly did not purchase enough handpieces to allow for such sterilization and instead “directed personnel to use CaviWipes to ‘clean’ handpieces between patients.”
The government alleged that by billing Medicaid for services provided using unsterilized equipment, UAHS violated the Federal False Claims Act as well as the New York False Claims Act. UAHS agreed to settle the allegations by paying $2.7 million, of which approximately $1.3 million will go to the federal government.
“It is inconceivable that a healthcare business would seek to cut corners when it comes to the appropriate cleaning and sterilization of medical devices,” said U.S. Attorney James P. Kennedy, Jr. “This settlement under the False Claims Act holds Upper Allegheny accountable for the risks created for patients in the past, while ensuring that in the future patient safety will be preserved and that taxpayers will only pay for services which are properly provided.”
An unnamed whistleblower brought the case against UAHS to federal court. Under the qui tam provisions of the federal FCA individuals can file lawsuits regarding fraud on behalf of the government. Qui tam whistleblowers are then eligible to receive a monetary award for 15-30% of the amount that the government recovers from the case.
The qui tam provisions are an essential element to the FCA and have enabled it to become what one DOJ official referred to as “the most powerful tool the American people have to protect the government from fraud.” According to the DOJ, in the 2020 fiscal year, more than two-thirds of the total monies recovered from FCA cases came from qui tam whistleblower cases. In fiscal year 2020, the government recovered $2.2 billion total through FCA settlements and judgments and $1.6 billion of that total came from qui tam cases. Furthermore, the government paid out $309 million to FCA whistleblowers in the 2020 fiscal year.
Healthcare fraud cases like the UAHS case continue to be a main area where qui tam whistleblowers are rewarded for exposing fraud against the government. In addition to healthcare fraud, a recent announcement by the DOJ suggests that COVID-19 fraud will be a main area of enforcement efforts in the coming months. On May 17, U.S. Attorney General Merrick Garland announced the establishment of the COVID-19 Fraud Enforcement Task Force. The Task Force aims to “marshal the resources of the Department of Justice in partnership with agencies across government to enhance enforcement efforts against COVID-19 related fraud.” On May 26, the DOJ announced criminal charges against 14 defendants from across the country “for their alleged participation in various health care fraud schemes that exploited the COVID-19 pandemic and resulted in over $143 million in false billings.”
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Upper Allegheny Health System To Pay $2.7 Million To Settle False Claims Act Allegations