Ohio-Based Medical Facilities To Pay $10.25 Million To Resolve FCA Whistleblower Lawsuit

False Claims Act

Three Ohio-based psychiatric care and treatment facilities have agreed to pay $10.25 million to resolve a whistleblower lawsuit alleging multiple violations of the False Claims Act. Oglethorpe Inc. and its three facilities Ridgeview Behavioral Hospital, Cambridge Behavioral Hospital, and The Woods at Parkside (collectively Oglethorpe) allegedly offered free long-distance transport for patients and prospective patients as an incentive to receive treatment that would then be billed to the government. The company and the three facilities also allegedly billed the government for unnecessary inpatient psychiatric care for patients. 

According to a U.S. Department of Justice (DOJ) press release, Darlene Baker, a former client advocate at one of the psychiatric hospitals, filed a qui tam lawsuit against Oglethorpe in October of 2016. The lawsuit alleged that Oglethorpe violated the False Claims Act by providing illegal incentives in the form of free transportation to and from its treatment centers. 

The Special Agent in Charge of the case, Lamont Pugh for the Office of Inspector General of the U.S. Department of Health and Human Services, said that “kickbacks in the form of free van rides and the false claims subsequently submitted to federal health care programs come at a tremendous cost to patients and the taxpayers.” The Anti-Kickback Statute of the False Claims Act “prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by a federal health care program.” The lawsuit views the alleged free bussing of patients as an illegal incentive to bill the government health programs such as Medicare, Medicaid, and TRICARE for services patients might not have received otherwise. 

The government also alleged that Oglethorpe submitted false claims by ordering medically unnecessary inpatient psychiatric admissions and other services at their two psychiatric facilities. Billing a federal medical program for services that patients do not really need is a common form of federal medical fraud, which the False Claims Act clearly prohibits. Acting U.S. Attorney for the Southern District of Ohio Vipal J. Patel said:“Submitting false claims by billing for unnecessary inpatient psychiatric hospitalizations is not only inappropriate – it’s illegal.” In cases such as this, government officials often comment on the potential for alleged medical fraud schemes like this one to erode the public’s trust in the U.S. medical system.

Darlene Baker, the whistleblower (or relator as they are legally known) will receive a portion of the total $10.25 million ranging from 15 to 30% of the total. This False Claims Act reward system has been shown to effectively increase the number of credible whistleblower disclosures, greatly expanding the DOJ’s ability to prosecute fraud of all kinds. The False Claims Act whistleblower is so powerful that in 2020, over two-thirds of the total money recovered by the False Claims Act stemmed from whistleblower disclosures.

Read the DOJ’s press release here.

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