Consumer Fraud

Florida hospital system settles whistleblower fraud allegations for $26 million

osha whistle Florida hospital system settles whistleblower fraud allegations for $26 millionA Florida hospital system has agreed to pay $26 million to resolve whistleblower allegations that six of its hospital facilities admitted patients who did not require hospitalization, resulting in millions of dollars in false claims being submitted to Medicare, Medicaid and other federally funded health care programs.

According to the complaint, Shands Healthcare knowingly submitted inpatient claims to Medicare, Medicaid, and TRICARE for a number of services and procedures that it knew were only supposed to be billed as outpatient services and procedures. The whistleblower complaint alleges the fraud scheme went on from 2003 through 2008,

The six Shands hospitals implicated in the fraud scheme are Shands at Jacksonville; Shands at Gainesville (also known as Shands at the University of Florida); Shands Alachua General Hospital; Shands at Lakeshore; Shands Starke; and Shands Live Oak.

Shands Hospitals will pay $25.2 million to the U.S. and $829,600 to the State of Florida to resolve the allegations, which were brought under the qui tam or “whistleblower” provisions of the False Claims Act (FCA) by Terry Myers, president of health care consulting firm YPRO Corp. The FCA’s whistleblower provisions allow private individuals to sue on behalf of the federal government when they witness fraud, waste, mismanagement, and other wrongdoing.

To encourage whistleblowers to report wrongdoing, especially when it amounts to a loss of taxpayer dollars, the FCA entitles whistleblowers to share in the recovery, typically about 20 to 25 percent.

“The Department of Justice is committed to ensuring that Medicare funds are expended appropriately, based on the medical needs of patients rather than the desire of health care providers to maximize profits,” said Stuart Delery, Assistant Attorney General for the Civil Division.  “Hospitals participating in Medicare must bill for their services accurately and honestly.”

“The public expects its medical professionals to operate with a high degree of integrity,” said A. Lee Bentley III, Acting U.S. Attorney for the Middle District of Florida.  “When health care providers seek higher profits at the expense of their professional judgment, the public trust in the medical system is compromised.”

The $26 million settlement covers only part of the allegations in the case. The Orlando Sentinel reports that the settlement covers just a part of the whistleblower’s allegations in the case. According to Mr. Myers’ lawyer, allegations that the same six hospitals submitted fraudulent claims to U.S. health care programs for outpatient services are still outstanding.


U.S. Department of Justice