Clayton Deardorff and his company Stepping Stones Healthcare, LLC (SSH) will pay $589,000 to resolve allegations that they violated the False Claims Act. According to a U.S. Department of Justice press release, two whistleblowers, Mitchell Monsour and Stephen Vaughan, alleged in a qui tam whistleblower lawsuit that Deardorff and SSH were engaged in a kickback scheme. For their role in the case, the two whistleblowers will receive an award of $159,000.
Monsour and Vaughan alleged that “Deardorff and SSH submitted, or cause[d] to be submitted, false claims for payment to the Medicare Program as a result of a kickback arrangement with Franklin County Memorial Hospital…for the recruitment and referral of intensive outpatient therapy (IOP) patients.” Franklin County Memorial Hospital is a Mississippi Critical Access Hospital (CAH), which are Medicare-designated facilities “limited to 25 beds that operate in medically underserved areas.” According to the press release, “Medicare exempts CAHs from [a] fixed prospective payment system” to “encourage hospital coverage in rural, underserved areas.” Medicare also exempts the CAHs and “reimburses 101% of actual allowable costs of providing Medicare beneficiaries with outpatient, inpatient, laboratory, ambulance, and post-acute care services.”
Allegedly, Deardorff and SSH engaged in a “monthly fixed fee payment arrangement” as part of the kickback scheme. The whistleblowers also allege that “beginning in 2010 Deardorff and SSH illegally charged Franklin County Hospital 10% of gross charges billed for IOP services,” or “deferred fees.” These deferred allegedly “constitute illegal remuneration in exchange for the recruitment and referral of IOP patients.” The press release adds a reminder that “[t]he FCA claims settled are allegations only, and there has been no determination of liability.”
At the end of 2021, WNN compiled a list of standout False Claims Act cases and settlements that involved qui tam lawsuits throughout the year. There were several healthcare cases in 2021 that led to big settlements: check out that article here.