UNITED STATES NEWS

Delaware hospital system will pay $47 million to settle whistleblower allegations of billing fraud

Dec 22, 2023, 2:58 PM

DOVER, Del. (AP) — Delaware’s largest hospital system will pay more than $47 million to settle whistleblower allegations by its former compliance officer that it provided kickbacks to outside doctors in return for patient referrals, resulting in fraudulent Medicaid billing.

The settlement announced Friday comes nearly seven years after Ronald Sherman filed his whistleblower lawsuit, which remained under seal for more than a year, against Christiana Care Health System.

The lawsuit alleged that Christiana Care employees, including nurse practitioners, hospitalists and physician assistants, treated patients referred by non-CHSS physicians at no cost or below fair market value.

Those outside physicians then billed insurers, primarily Medicaid, for care that was actually provided by Christiana employees.

In exchange for the unearned billings, the physicians continued to funnel patients to Christiana Care rather than to other hospitals, according to the lawsuit.

The alleged fraud occurred between April 2011 and September 2013 involving Christiana’s neonatology department, and between April 2011 and April 2017 invoving the cardiovascular surgery, urology, neurosurgery and ear, nose and throat departments.

State and federal authorities said the scheme violated anti-kickback laws and state and federal false claims statutes.

Attorneys for Sherman said the case is believed to be the largest False Claims Act settlement in Delaware history and similar lawsuits could be brought against other hospitals nationwide.

“Any other hospital in the country which operates under that model that led to this settlement should consider changing its practices immediately,” Dan Miller, lead counsel for Sherman, said in a statement.

Miller suggested that the scheme was partly a reaction to new industry rules in 2003 limiting the number of hours that hospitals could require medical residents to work.

“To fill the gap left behind by residents, many hospitals hired mid-level providers such as nurse practitioners and physician assistants,” he said. “At Christiana Care, we alleged that services performed by mid-level providers were billed for by private attending physicians who were in a position to make future referrals to the hospital. Put differently, we alleged that Christiana Care paid kickbacks to the private physicians in the form of free employees.”

Under the settlement, Christiana Care will pay about $32 million to the federal government and roughly $11 million to the state of Delaware, with half of each amount being restitution. Sherman will receive slightly more than $12 million, with roughly $9 million coming from the federal government and $3 million from the state. Christiana Care will also pay $4.6 million to Sherman’s attorneys.

A statement issued by Shane Hoffman, a spokesman for Christiana Care, noted that the settlement involves no admission of liability.

“We are pleased to settle this matter as we focus forward on meeting the evolving health needs of the diverse communities we serve,” it said.

In 2010, Christiana Care paid $3.3 million to settle a similar whistleblower suit alleging Medicare and Medicaid fraud involving neurology doctors. As part of that settlement, Christiana entered into a “corporate integrity agreement” with the inspector general’s office of the U.S. Department of Health and Human Services.

That agreement, among other things, required Christiana to maintain programs to detect and encourage internal reporting of potential violations of laws prohibiting kickbacks and patient referrals in return for financial consideration. Christiana also was required to report probable violations and overpayments to the government.

The lawsuit alleges that Sherman was stonewalled and marginalized by Christiana officials including Dr. Janice Nevin, the president and CEO, after expressing concerns about questionable billing practices that the hospital continued to engage in despite the earlier settlement. He was fired by Nevin in 2014.

“Mr. Sherman had an obligation to investigate compliance concerns. The mere fact that he was doing so appeared (to) cause a ‘problem’ for Dr. Nevin, which she was unable to explain during her deposition,” former federal prosecutor Virginia Evans said in an export report commissioned by Sherman’s attorneys.

United States News

Associated Press

Three former Department of Education employees charged with defrauding Arizona voucher program

Three former Arizona Department of Education employees were indicted on conspiracy and money laundering charges in what prosecutors say was a scheme to defraud more than $600,000 from an education voucher program that has drawn criticism for its skyrocketing costs and lax regulation by the state. Prosecutors said Thursday that the three employees approved applications […]

2 hours ago

Associated Press

EPA to delay rules for some power plants until after November election

WASHINGTON (AP) — The Environmental Protection Agency said Thursday it is delaying planned rules to curb emissions from existing natural gas plants that release harmful air pollutants and contribute to global warming. The agency said it is still on track to finalize rules for coal-fired power plants and new gas plants that have not come […]

2 hours ago

Associated Press

Judge holds veteran journalist Catherine Herridge in civil contempt for refusing to divulge source

WASHINGTON (AP) — A federal judge held veteran investigative reporter Catherine Herridge in civil contempt on Thursday for refusing to divulge her source for a series of stories during her time at Fox News about a Chinese American scientist who was investigated by the FBI but never charged. U.S. District Judge Christopher Cooper in Washington […]

2 hours ago

President Joe Biden, second from the right, looks over the southern border, Thursday, Feb. 29, 2024...

Associated Press

On the Rio Grande, 300 miles apart, Biden and Trump try to use immigration to election advantage

Three hundred miles apart, President Joe Biden and likely Republican challenger Donald Trump walked along the U.S.-Mexico border in Texas Thursday.

3 hours ago

Associated Press

Maryland State House locked down, armed officers seen responding

ANNAPOLIS, Md. (AP) — The Maryland State House was locked down for an undisclosed security threat late Thursday afternoon. Reporters with officers on the ground floor of the building were told to lock their doors shortly after 5 p.m. by an aide to Maryland House Speaker Adrienne A. Jones. About 30 minutes later, police escorted […]

3 hours ago

Associated Press

Indiana Legislature approves bill adding additional verification steps to voter registration

INDIANAPOLIS (AP) — Indiana lawmakers passed legislation Thursday that expands the power of the state to verify voters’ addresses and adds an additional residency requirement for first-time voters. The bill’s Republican sponsor state Sen. Mike Gaskill called it a “commonsense bill” that adds protections against fraud, but voting advocates have blasted the changes as new […]

3 hours ago

Sponsored Articles

...

DISC Desert Institute for Spine Care

Sciatica pain is treatable but surgery may be required

Sciatica pain is one of the most common ailments a person can face, and if not taken seriously, it could become one of the most harmful.

...

Day & Night Air Conditioning, Heating and Plumbing

Day & Night is looking for the oldest AC in the Valley

Does your air conditioner make weird noises or a burning smell when it starts? If so, you may be due for an AC unit replacement.

...

Sanderson Ford

The best ways to honor our heroes on Veterans Day and give back to the community

Veterans Day is fast approaching and there's no better way to support our veterans than to donate to the Military Assistance Mission.

Delaware hospital system will pay $47 million to settle whistleblower allegations of billing fraud