Consumer Fraud

U.S. takes over whistleblower lawsuit accusing Mobile, Ala., clinic of Medicare fraud

osha whistle U.S. takes over whistleblower lawsuit accusing Mobile, Ala., clinic of Medicare fraudThe U.S. government has taken over a whistleblower lawsuit originally brought against Infirmary Health Systems Inc. of Mobile, Ala., and related companies by a doctor who alleges the companies participated in a scheme of illegally billing Medicare for services obtained through  a system of providing and receiving kickbacks in exchange for referrals.

According to the lawsuit, IMC-Diagnostic & Medical Clinic P.C. billed Medicare for services referred by Diagnostic Physicians Group doctors in violation of the Stark Law and Anti-Kickback Statute.  IMC-Diagnostic and Medical Clinic is owned by Infirmary Medical Clinics, a subsidiary of Infirmary Health System. All of the subsidiary companies are named as defendants along with Diagnostic Physicians Group in the lawsuit.

Dr. Christian Heesch, a former Diagnostic Physicians Group physician, filed the lawsuit in 2011 under the qui tam or whistleblower provisions of the False Claims Act (FCA), which permits individuals (called “relators”) to sue on behalf of the U.S. government and share a percentage of the recovery, usually around 20-25 percent.

The False Claims Act also allows the U.S. government to intervene and take over such lawsuits, as it did with Dr. Heesch’s case. Whistleblowers can proceed with their lawsuits whether or not the federal government decides to join the suit or take it over.

The lawsuit alleges that the improper payments, which included a percentage of money collected from Medicare for tests and procedures the doctors referred to the clinic, resulted in the submission of false claims to Medicare.

“Financial arrangements that compensate physicians for referrals encourage physicians to make decisions based on financial gain rather than patient needs,” said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division. “The Department of Justice is committed to preventing illegal financial relationships that corrupt the integrity of our public health programs.”

Kenyen Brown, U.S. Attorney for the Southern District of Alabama, said that “By bringing cases such as this one against Infirmary Health System, we hope to ensure that precious health care resources are not wasted due to improper financial relationships among health care providers.”

The government’s intervention in this lawsuit underscores its push to combat health care fraud. One of its most powerful tools in the effort to protect taxpayer-funded health care programs is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $14.7 billion through False Claims Act cases such as this one. Nearly 73 percent of funds recovered come from cases involving Medicare and Medicaid fraud.


U.S. Department of Justice