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October 12, 2015 — North Broward Hospital District (“Broward Health”), a taxpayer financed system of hospitals and health facilities, agreed to pay $69.5 million to settle federal charges that it made illegal payments to physicians using a secret compensation system that rewarded doctors for patient referrals and penalized them for accepting low income patients.
The False Claims Act case was filed by Dr. Michael Reilly, a Fort Lauderdale orthopedic surgeon, who was once approached by Broward Health about becoming a staff physician, which he turned down. In his whistleblower lawsuit, he said the hospital district maintained a secret compensation system for cardiologists, oncologists, and orthopedic surgeons, who collected salaries of $1 million or more. This system rewarded physicians for referrals to hospital services, such as physical therapy, and penalized doctors for taking on low-paying charity cases. Reilly claimed that tying compensation to referrals could lead to raised medical costs by generating unnecessary tests and doctor visits and could compromise patient care.
“Broward Health’s scheme to overcompensate physicians in exchange for referrals over the last eight years has been a deliberate strategic plan to boost hospital admissions and outpatient visits for all paying patients, including patients with Medicare and Medicaid coverage,” the lawsuit claims. “Broward Health’s financial strategists have personally profited from bonus payments based in part on hospital revenues.”
Fraudulent schemes run by hospitals, such as the one discussed above, have long lasting consequences for everyday Americans. Specifically, the diversion of funds due to fraud increases the costs of other legitimate medical services and may foster mechanisms designed to recoup these losses. These mechanisms may result in reduced benefit coverage, changes in eligibility for federal programs, higher premiums for individuals and/or employers, and higher copays. Additionally, physicians performing unnecessary procedures to increase reimbursement compromises patient safety. Healthcare fraud also tarnishes the reputation of the medical community and raises concerns about the ethics governing the conduct of all physicians, not just the bad ones. Thus, healthcare fraud is not a victimless crime and needs to be stopped.
While Waters & Kraus is not handling this particular qui tam case, we are well versed in the False Claims Act and have handled similar complex healthcare fraud cases. If you have comparable claims against a different healthcare provider we can help you report it. Contact us by email or call our qui tam attorneys at 800.226.9880 to learn more about our practice and how we can work together to notify the government of fraudulent abuses.
This article was contributed by Anne Izzo, one of the firm’s whistleblower attorneys.