On February 13, the U.S. Department of Justice (DOJ) announced that Spacelabs Healthcare, LLC will pay $2.5 million to resolve allegations that they violated the False Claims Act by overcharging the U.S. “for patient monitoring equipment sold to the U.S. Department of Veterans Affairs (VA) and the Department of Defense.” Marci Gebhardt and Christopher Kelley, two former Spacelabs employees, became qui tam whistleblowers in the case and will receive $437,500.
The qui tam provisions of the False Claims Act 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, if one occurs.
Allegedly, from 2014 to 2019, “Spacelabs failed to follow the Price Reductions Clause in a VA contract, which required Spacelabs to provide the government with certain lower prices offered to another customer.” This led to the government “paying more than it should have for patient monitoring equipment,” the press release states.
According to the DOJ, “The settlement also resolves allegations that Spacelabs failed to follow a related clause in a Defense Logistics Agency contract.”
Gebhardt was formerly employed at Spacelabs as a Government Business Specialist, and Kelley was a Government Accounts Manager at the company.
“This settlement sends a clear message that the VA OIG will actively investigate allegations involving contractors overbilling for products provided to VA,” said Special Agent in Charge Kim R. Lampkins of the Department of Veterans Affairs Office of Inspector General’s Mid-Atlantic Field Office. “The VA OIG will continue to work with the Department of Justice and our law enforcement partners to ensure the integrity of VA programs and services.”
Health care fraud is one area in which the False Claims Act has been especially effective: in Fiscal Year 2022, “[s]ettlements and judgments under the False Claims Act exceeded $2.2 billion,” according to prior WNN reporting. Of that $2.2 billion, “over $1.7 billion related to matters that involved the health care industry, including drug and medical device manufacturers, durable medical equipment, home health and managed care providers, hospitals, pharmacies, hospice organizations, and physicians.” Health care fraud and schemes often harm the most vulnerable citizens and can erode trust in the medical system, so whistleblowers play a critical role in exposing this wrongdoing and saving taxpayers and patients money.
