UPMC Hamot to Pay $20.75M to Settle False Claims; Whistleblower to Get $6M

Posted: 03/11/2018  browse the blog archive
UPMC Hamot to Pay $20.75M to Settle False Claims; Whistleblower to Get $6M

UPMC Hamot (Hamot), a hospital based in Erie, Pennsylvania – and now affiliated with the University of Pittsburgh Medical Center (UPMC) – and Medicor Associates Inc. (Medicor), a regional physician cardiology practice, have agreed to pay the government $20,750,000 to settle a False Claims Act lawsuit alleging that they knowingly submitted claims to the Medicare and Medicaid programs that violated the Anti‑Kickback Statute and the Physician Self‑Referral Law, the Justice Department announced this week.  Hamot became affiliated with UPMC after the conduct resolved by the settlement occurred.

The Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid, and other federally funded programs.  The Physician Self-Referral Law, commonly known as the Stark Law, prohibits a hospital from billing Medicare for certain services referred by physicians with whom the hospital has an improper compensation arrangement.  Both the Anti-Kickback Statute and the Stark Law are intended to ensure that a physician’s medical judgment is not compromised by improper financial incentives and is instead based on the best interests of the patient.

The settlement resolves allegations brought in a whistleblower action filed under the False Claims Act alleging that Hamot paid Medicor up to $2 million per year under twelve physician and administrative services arrangements which were created to secure Medicor patient referrals.  Hamot allegedly had no legitimate need for the services contracted for, and in some instances the services either were duplicative or were not performed.

The lawsuit was filed by Dr. Tullio Emanuele, who worked for Medicor from 2001 to 2005, under the qui tam, or whistleblower, provisions of the False Claims Act.  The Act permits private parties to sue on behalf of the government when they believe that defendants submitted false claims for government funds and to share in any recovery.  The Act also allows the government to take over the case or, as in this case, the whistleblower to pursue it.  In a March 15, 2017 ruling, the U.S. District Court for the Western District of Pennsylvania held that two of Hamot’s arrangements with Medicor violated the Stark Law.  The case was set for trial when the United States helped to facilitate the settlement.  Dr. Emanuele will receive $6,017,500.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.