Record Settlement In Halifax ‘Doc Kickback’ Case
By Dr. James Palermo // March 4, 2014
FRAUDULENT HOSPITAL ADMISSIONS FOCUS OF SECOND TRIAL
A 2009 lawsuit that claimed that for more than a decade, Halifax Hospital violated the federal Stark Law, which bars physicians from getting extra cash from patient referrals through kickbacks, split fees and other under-the-table arrangements, has culminated in a record-setting settlement thought to be twice the monetary penalty ever paid out for Medicare/Medicaid fraud.
The Orlando Sentinel reported that the Daytona Beach hospital system reached agreement with the U.S. Justice Department just before prospective jurors in Orlando federal court were about to be questioned on Monday, and quoted unnamed sources as saying the amount was $85 million.
With the government seeking $500 million, had the case gone to a jury, the judgment could have run into hundreds of millions of dollars if it was found that the hospital knew it was violating the Stark Law while it was defrauding Medicare and Medicaid.
HALIFAX HEALTH CONSISTENTLY DENIES ALL ALLEGATIONS
The “agreement in principle” requires that Halifax pay the settlement amount over a period of five years, plus attorneys’ fees, and requires Halifax Health to agree to a corporate integrity and compliance program, which, according to the court transcript would “make sure that something like this doesn’t happen in the future.”
Halifax’s requests for dismissal were denied twice before the trial date, and the hospital continues to deny the fraud accusations.
PART II: FRAUDULENT ADMISSIONS OF PATIENTS WITHOUT CLINICAL CAUSE
However, the pain for the health system is not over. Because the very complex suit involved not only Stark Law infractions, but also allegations that Halifax admitted patients who didn’t need inpatient care solely to make money, the Presiding U.S. District Judge Gregory Presnell agreed to split the case into two trials.
The second trial, set for July, will focus on allegations that the hospital made a practice of admitting patients to the hospital who didn’t meet clinical criteria for admission, and then billed Medicare and Medicaid for their care.
According to the complaint, during just one month of 2008, 82 percent of patients admitted for chest pain did not meet criteria.
That part of the false claims case, of which the government is not a party and which will be tried by private attorneys, could also result in damages plus penalties in the hundreds of millions of dollars range.
MULTIMILLION DOLLAR WINDFALL FOR WHISTLEBLOWER
The lawsuit was first filed in 2009 by former Halifax Medical Center compliance officer, Elin Baklid-Kunz, who noticed illegal kickbacks to doctors and billing fraud that went on for more than a decade.