Nearly $1 Million Settlement Resolves Whistleblower Allegations of Medically Unnecessary Spinal Surgeries

Spinal Surgery Whistleblower

On May 7, U.S. Attorney Tessa M. Gorman announced that two Tacoma hospitals and a former surgeon agreed to pay nearly $1 million to settle False Claims Act (FCA) allegations of medically unnecessary spinal surgeries. The settlement resolves allegations brought forward by a qui tam whistleblower.

According to the government, from 2013 to 2018, former Orthopedic Surgeon Kevin Schoenfelder billed spinal surgeries to government health programs, including Medicare, TRICARE, and Veterans Affairs, when they were not medically necessary. Schoenfelder will pay $197,000 to resolve the case. 

Two Tacoma hospitals, CHI Franciscan Health and St. Joseph Medical Center, will additionally pay $745,654 to resolve the matter. “CHI resolved claims that the hospital billed for Dr. Schoenfelder’s performance of spinal surgery at more spinal levels than necessary and medically unnecessary spinal fusions at Tacoma’s St. Joseph Hospital,” according to the government.

“Unnecessary surgeries put patients at risk of medical complications,” said U.S. Attorney Gorman. “In this case we are concerned about protecting taxpayer funded health care, but even more concerned that patients may have needlessly suffered when enduring procedures that were more invasive than was necessary.”

“Health care providers who perform medically unnecessary procedures compromise the integrity of Federal health care programs and expose their patients to potential harm,” added Special Agent in Charge Steven J. Ryan of the Department of Health and Human Services Office of Inspector General. 

The case stems from a qui tam lawsuit filed by Dr. Daniel Nehls in 2018. Under the FCA’s qui tam provisions, whistleblowers may file suits on behalf of the federal government if they know that an individual or company is defrauding the government.

In successful qui tam suits, whistleblowers are eligible to receive between 15-30% of the settlement. In this case, Dr. Nehls is set to receive 22%.

On July 25, a bipartisan group of senators introduced the False Claims Amendments Act of 2023, which address a few technical loopholes undermining the success of the FCA. The bill is widely supported by whistleblower advocates.

“The False Claims Act is America’s number one fraud-fighting law,” said whistleblower attorney Stephen M. Kohn. “These amendments are urgently needed to ensure that whistleblowers can continue to play their key role in protecting taxpayers from corporate criminals.”

Kohn sees the passage of the False Claims Amendments Act as one of the seven most urgently needed whistleblower reformsNational Whistleblower Center (NWC), where Kohn serves as Chairman of the Board, has issued an Action Alert calling on Congress to pass the bill.

Join NWC in Taking Action:

Demand that Congress strengthen the False Claims Act

Further Reading:

DOJ resolves allegations Tacoma spine surgeon billed for unnecessary surgeries

Bipartisan Legislation Unveiled to Strengthen False Claims Act

More False Claims Act Whistleblower News

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