Two Whistleblowers’ Disclosures Led to $3 Million Healthcare Industry Settlement

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On November 9, the U.S. Department of Justice (DOJ) announced that Omega Healthcare Investors, Inc. will pay $3 million to resolve allegations that the entity to which Omega was a successor-in-interest, MedEquities Realty Trust, Inc., submitted false claims to Medicare and Medicaid. The settlement stemmed from a qui tam, or whistleblower, lawsuit filed by Robert Van Boven, M.D., and Sharon Van Boven.

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, MedEquities “paid kickbacks to physicians to induce them to refer patients to a hospital developed by Lakeway Regional Medical Center, LLC. (LRMC).” According to the press release, “MedEquities offered the physicians a low-risk, high-reward investment in Lakeway Realty, a joint venture formed by MRT-Lakeway to purchase the hospital and lease it back to LRMC.”

The U.S. government alleged “that claims for reimbursement based on these referrals and submitted by LRMC to the Medicare and Medicaid programs between March 2, 2015 and August 31, 2016 were unlawful under the federal Anti-Kickback Statute.”

The DOJ states that the whistleblower lawsuit filed by the Van Bovens is under seal, “subject to an order of the Court permitting the United States to disclose this settlement.”

The Importance of Qui Tam Whistleblowers

This settlement — and plenty of other qui tam whistleblower cases — show how whistleblowers are critical to uncovering waste, fraud, and abuse, especially in the medical and health care industry. Fraudulent schemes can be particularly harmful to patients and erode trust in the medical system. In Fiscal Year 2021, qui tam whistleblowers helped the DOJ recover $1.6 billion in settlements. The DOJ highlighted health care fraud as “the leading source of the department’s False Claims Act settlements and judgments.”

Senator Chuck Grassley (R-IA), who has been consistently championed as the “patron saint” of whistleblowers, proposed amendments to the False Claims Act in 2021 that would strengthen protections for whistleblowers and clarify existing law. The amendment was widely supported by whistleblower organizations and advocates. However, WNN sources discovered that the pharmaceutical lobby intervened with the amendment’s passage. The National Whistleblower Center (NWC) is urging Congress to protect the False Claims Act: learn more here.

Read the DOJ press release here. 

Read more False Claims Act/qui tam news on WNN here. 

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