A whistleblower lawsuit accusing Indiana University Health Inc. and HealthNet Inc. of engaging in an illegal kickback scheme has ended with an $18 million settlement, federal and state official announced April 27.
The lawsuit, originally filed by Dr. Judith Robinson under the whistleblower provisions of the False Claims Act, alleged Indiana University Health provided HealthNet with an interest-free line of credit in part to coax HealthNet to refer its obstetrics and gynecology patients to IU Health’s Methodist Hospital.
The whistleblower suit claims this scheme violated the federal Anti-Kickback Statute and the federal and state False Claims Act. The state’s involvement in the complaint was tied to Medicaid beneficiaries, which the kickback scheme allegedly targeted. The Medicaid program is jointly funded by the U.S. government and the states.
Federal and state officials investigated Dr. Robinson’s claims and opted to intervene in the lawsuit. They allege that the unlawful kickback arrangement between IU Heath and HealthNet was in place from May 2013 through August 2016.
Under the settlement agreement, IU Health and HealthNet will each pay approximately $5.1 million to the U.S. and $3.9 million to the state.
“Helping to return millions of dollars in taxpayer funds to federal healthcare programs and the Indiana Medicaid program is critically important to me and my office,” said Joshua Minkler, U.S. Attorney for the Southern District of Indiana. “Waste, fraud, and abuse can never be tolerated and tear at the fabric of first-class health care in this country.”
Dr. Robinson, who formerly held a number of positions at both Methodist Hospital and HealthNet, was awarded about $2.8 million for her role in helping the state and federal government recover the Medicaid funds.