Earlier this month, a Joint Stipulation of Dismissal was filed on behalf of a management company and several anesthesiologists, gastroenterologists, an affiliated professional services corporation, and various ambulatory surgery center defendants settling a qui tam action for violations of the Federal False Claims Act and the Georgia State False Medicaid Claims Act.
The U.S. Attorney’s Office for the Northern District of Georgia announced that a decade after the filing of the initial Complaint, the defendants entered into a Settlement Agreement in which they agreed — without any admission of liability — to pay $28 million dollars to resolve the government’s allegations of an extensive kickback scheme in which certain anesthesia providers made payments for drugs, supplies, equipment, and labor, and provided free staffing, to several Georgia surgery centers to induce the centers to reward the anesthesia providers with exclusive professional services contracts. The relators in this case, anesthesiologists who formerly provided professional services at the defendant surgery centers, received $4.7 million from the settlement under the whistleblower provisions of the False Claims Act.
As described in the Fourth Amended Complaint, the defendant anesthesiologists violated the False Claims Act under an express certification theory, in which providers submitted false cost reports to Medicare, certifying, in pertinent part, that the services identified in the cost reports were provided in compliance with Medicare laws and regulations. The government alleged that defendants violated the Anti-Kickback Statute by paying remuneration in exchange for referrals for services for which a Federal health care program may make payment, which rendered defendants ineligible for reimbursement for claims they submitted to both Medicare and Medicaid. The government sought, among other things, civil monetary penalties between $10,957.00 – $21,916.00 per claim submitted in violation of the False Claims Act over a time period spanning from 2005 – 2015.
This case highlights the potentially devastating consequences for violations of the False Claims Act for providers engaging in schemes to secure referrals in exclusive contract arrangements. It is also a stark reminder of the significant financial incentive for competitors, disgruntled former employees, and/or other stakeholders to become qui tam relators.
How Frier Levitt Can Help
Frier Levitt attorneys are experienced in the representation of providers seeking to structure compliant management and professional services arrangements, and/or defending audits or allegations that may lead to FCA liability. We regularly counsel healthcare providers seeking to implement proactive compliance programs and/or corrective action plans for identified deficiencies. In certain qualifying circumstances, voluntary self-disclosure may be an option for avoiding the harshest penalties. For more information, contact Frier Levitt to speak with an attorney.
