June 13, 2023. The United States Department of Justice settled a case three Michigan healthcare companies for violating the False Claims Act. Under the terms of the settlement, VHS of Michigan Inc., doing business as The Detroit Medical Center Inc. (DMC), Vanguard Health Systems Inc. (Vanguard), and Tenet Healthcare Corporation (Tenet) paid over $29 million to settle allegations that they paid kickbacks in exchange for referrals of government business. A whistleblower came forward to report this fraud. A physician himself, the whistleblower was a former employee of a medical school affiliated with DMC. For successfully filing a qui tam lawsuit, the whistleblower, or relator, will receive a $ 5,205,211.37 award or approximately 17% of the settlement.
The Anti-Kickback Statute (AKS) prohibits anyone from offering, soliciting, paying, or receiving remuneration for referrals of services that are reimbursed by a federal healthcare program. The AKS is broad and covers any form of value, including cash, gifts, travel, and/or services. The AKS aims to prevent financial incentives from driving healthcare decisions and harming patient care. In this case, the government found that the institutions provided free or reduced-cost services, in the form of free or below-market-value labor to 13 specially chosen physicians to induce them to refer more Medicare patients to their facilities. This arrangement is illegal and violates the integrity of the healthcare system.
The False Claims Act (FCA) is a federal law that prohibits individuals or companies from submitting false or fraudulent claims for payment to the government. The FCA incentivizes whistleblowers to expose fraud by offering them a percentage of the recovery amount. The consequences of violating the AKS and FCA are severe, as demonstrated by this settlement. The institutions agreed to pay over $29 million to the government to resolve the allegations. The settlement of this case shows that even the largest healthcare institutions are not immune to compliance scrutiny. Compliance with AKS and other healthcare laws should be a top priority for all healthcare institutions, regardless of their size. Adherence to healthcare laws helps to promote patient care, support ethical practices, and protect the integrity of both privately and publicly funded healthcare systems. As the Deputy Assistant Attorney General of the Justice Department’s Civil Division said about the case, “Physicians should evaluate where to send patients for medical services based on the quality of care the patients will receive, not the financial benefits that the physicians will reap.”
If you would like to report healthcare fraud, you can contact attorneys at Tycko & Zavareei LLP. Eva Gunasekera and Renée Brooker are former officials of the United States Department of Justice and prosecuted whistleblower cases under the False Claims Act. Eva was the Senior Counsel for Health Care Fraud. Renée served as Assistant Director at the United States Department of Justice, the office that supervises False Claims Act cases in all 94 United States District Courts. Eva and Renée now represent whistleblowers. For a free consultation, you can contact Eva Gunasekera at [email protected] or contact Renée at [email protected] (tel.: 202-417-3664). Visit Tycko & Zavareei LLP’s website for whistleblowers to learn more at www.fraudfighters.net.