On June 11, the U.S. Attorney for the Northern District of Georgia announced that Creative Hospice Care, Inc., and affiliated companies paid $9.2 million to settle whistleblower allegations that the entities violated the False Claims Act by entering into kickback arrangements with medical directors in exchange for referrals of hospice patients to Creative Hospice.
The allegations were brought forward in three separate qui tam whistleblower lawsuits. The whistleblowers, one of whom is a former Creative Hospice employee responsible for marketing Creative Hospice’s services to health care providers, have received $1.5 million of the settlement.
According to the government, Creative Hospice paid kickbacks to medical directors which “included monthly stipends and a signing bonus paid to the medical directors. The government further claims that “the compensation allegedly increased when the medical director referred more patients and decreased when the medical director failed to make referrals.”
The government alleges that these kickbacks violated the Anti-Kickback Statute and caused the submission of false claims to federal healthcare programs.
“A physician’s health care decision should be based solely on the needs of the patient rather than the physician’s financial interests,” said U.S. Attorney Theodore S. Hertzberg. “Health care providers who place unlawful personal gain above their duty of care to patients must be held accountable for their dishonesty.”
“Patients should not have to wonder if their doctors’ medical decisions are being driven by unlawful inducements,” said FBI Atlanta Special Agent in Charge Paul Brown. “We will continue to hold accountable individuals, as well as companies, who participate in kickback schemes that threaten the integrity of our healthcare system.”
“Health care providers that participate in kickback schemes undermine the integrity of federal health care programs,” said Kelly Blackmon, Special Agent in Charge at the Department of Health and Human Services, Office of Inspector General (HHS-OIG). “This settlement demonstrates HHS-OIG’s unwavering commitment with our law enforcement partners to hold those accountable who put profit and personal gain ahead of the legitimate medical services.”
The False Claims Act’s qui tam provisions enable private citizens and private parties 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.
During FY 2024, settlements and judgments under the False Claims Act exceeded $2.9 billion and over $2.4 billion of the recoveries stemmed from qui tam whistleblower lawsuits. Furthermore, according to the government, a record 979 qui tam lawsuits were filed in FY 2024.
However, in September 2024, a district judge in Florida ruled that the False Claims Act’s qui tam provisions were unconstitutional. The U.S. federal government is urging the U.S. Court of Appeals for the Eleventh Circuit to reverse that decision, stating in a brief that “other than the district court here, every court to have addressed the constitutionality of the False Claims Act’s qui tam provisions has upheld them.”
National Whistleblower Center has issued an Action Alert allowing whistleblower supporters to write the members of Congress urging them to protect and strengthen and protect the False Claims Act.
The claims asserted in this case are allegations only, and there has been no determination of liability.
Join NWC in Taking Action:
Strengthen the False Claims Act and Protect it From Attack
Further Reading:
Mahlega Abdsharafat and Creative Hospice Settle Health Care Kickback Claims for $9.2 Million
