An anesthesiologist and member of the medical staff at Dignity Health, d/b/a St. Joseph’s Hospital, brought a False Claims Act qui tam lawsuit against the hospital and Neurosurgical Associates, LTD, in which he alleged a bait-and-switch scheme whereby patients thought they were undergoing invasive and high-risk surgeries performed by highly regarded and experienced neurosurgeons. However, he alleged the surgeries were performed by inexperienced medical students with no oversight from their teachers.  The alleged scheme allowed the experienced surgeons to bill Medicare for multiple surgeries performed by others at the same time, at the higher rate that Medicare reimburses for the highly skilled surgeons.

The hospital and neurosurgical group paid $10 Million to the government for the alleged Medicare fraud described by the United States as billing Medicare “for certain doubly and triply concurrent and overlapping surgeries.”  For bringing the allegations to the attention of the government, the anesthesiologist was paid a whistleblower reward, although the Justice Department did not include the amount of the reward in its press release.  Typically, that reward would be between 15% to 25% of the $10 Million.

As part of the False Claims Act settlement, the neurological group was required to enter into a corporate integrity agreement for 5 years with the United States Department of Health and Human Services Office of Inspector General. Under these restrictions, the neurological group will need to perform routine risk assessments and have the oversight of an outside auditor to make sure this does not happen again.

Dignity Health ran afoul of the False Claims Act in 2014 when it paid a $37 Million False Claims Act settlement to the government for alleged Medicare and TRICARE fraud. TRICARE is the government-funded health care program for military members.  In that earlier qui tam case, the whistleblower who brought the case was also a former employee of the hospital system, and she received $6.25 Million for reporting the alleged fraud.  Back then, the government imposed similar requirements under a corporate integrity agreement against the hospital system.

Under the qui tam, or whistleblower, provisions of the False Claims Act, individuals like the anesthesiologist can bring suit on behalf of the government and share between 15% to 25% of the government’s recovery. Healthcare fraud is exposed by individuals with knowledge that the fraud is occurring. Whistleblowers might be executives, employees, colleagues, clients, or competitors of the healthcare provider. Whistleblowers are protected against retaliation under the whistleblower provisions of the False Claims Act.