Consumer Fraud

Florida hospital to pay up to $90 million to partially settle whistleblower’s fraud allegations

osha whistle Florida hospital to pay up to $90 million to partially settle whistleblower’s fraud allegationsORLANDO, Fla.—A Florida Hospital reached an agreement with the U.S. government Monday that resolves part of a whistleblower’s lawsuit accusing the health care facility of engaging in illegal kickback schemes with cancer doctors and neurosurgeons and admitting patients unnecessarily.

Daytona Beach-based Halifax Health, a 678-bed hospital that serves much of Florida’s northeast coast, will pay the U.S. between $80 million and $90 million to resolve the allegations, which were brought against it by a longtime employee.

Elin Baklid-Kunz filed her whistleblower lawsuit against Halifax in 2009 under the federal False Claims Act, which allows private individuals to sue on behalf of the government when they possess knowledge and evidence of fraud, waste, abuse, and other wrongdoing that harms taxpayer-funded agencies and programs such as Medicare and Medicaid.

Ms. Baklid-Kunz worked more than 15 years at Halifax Health in financial and regulatory compliance roles. She alleges in her lawsuit that she witnessed more than a decade of billing fraud, inappropriate spinal surgeries, and illegal kickback to doctors designed to defraud Medicare and Medicaid.

After reviewing her claims, the Justice Department intervened and is prosecuting the hospital itself. Ms. Baklid-Kunz will still receive up to 30 percent of all recoveries the government makes in the case.

This week’s agreement resolves Ms. Baklid-Kunz’s allegations that the hospital violated the federal Stark Law by engaging in an illegal profit-sharing scheme with oncologists and neurosurgeons that resulted in the submission of false claims to Medicare.

Ms. Baklid-Kunz also alleged that Halifax charged the U.S. government for unnecessary and excessive spinal fusion surgeries performed at the hospital and overbilled for patient services performed by nurses or physicians’ assistants but billed at doctor rates. Those charges, along with allegations that the hospital admitted up to 82 percent of patients unnecessarily, will be argued in trial set for July.

Ms. Baklid-Kunz’s lawyer told Reuters that the unsettled allegations could potentially cost Halifax up to $400 million, including a $70-million recovery for Medicare and penalties.

The case, United States of America and Elin Baklid-Kunz vs. Halifax Hospital Medical Center and Halifax Staffing, Inc. was filed in a U.S. District Court in Orlando.

Sources:

U.S. Department of Justice
Reuters