In a recent qui tam lawsuit, Meadows Regional Medical Center Inc. has agreed to pay almost $13 million to resolve allegations of False Claims Act violations.

According to the claim, the medical facility had been improperly compensating physicians in exchange for referrals. In addition to the alleged False Claims Act violations, Meadows Regional was also accused of violating the Stark Law and Anti-Kickback Statute.

In order to resolve these allegations of False Claims Act violations, Meadows Regional has agreed to pay $12,875,000 to the state of Georgia and the federal government.

Not only does this settlement recover public funds, but it also helps remedy the systemic damage done to Georgia’s Medicaid program.

According to the False Claims Act lawsuit, Meadows Regional allegedly committed Medicaid fraud by having the physicians submit claims in exchange for financial kickbacks. Healthcare billing fraud occurs when a company or individual bills Medicaid, Medicare, or other government-sponsored programs for unnecessary services or for treatments often not received by the patient.

Allegations of Medicare or Medicaid fraud are typically levied against healthcare facilities or professionals, but can also be raised against labs and even ambulance transport companies.

If the healthcare company or professional submits faulty claims or has improper financial arrangements with physicians, like Meadows Regional allegedly did, these claims may constitute False Claims Act violations.

Overview of False Claims Act Violations and Law

The False Claims Act was enacted in the Civil War era to protect the government from contractor fraud. This law has been amended several times throughout the years, essentially protecting the rights and privacy of individuals called “whistleblowers” who report any fraud or other False Claims Act violations.

Along with the federal False Claims Act, there are also 31 state False Claims Acts that help protect state government programs from fraud. Whistleblowers who bring fraud to light can possibly receive between 15% to 30% of the settlement amount that may result from the qui tam lawsuit.

As part of the qui tam settlement, Meadows Regional has also agreed to cooperate with the Department of Health and Human Services Office of Inspector General.

By agreeing to the qui tam settlement Meadows Regional admits to no liability or wrongdoing. The company says it is working to correct this alleged administrative error.

“Once Meadows learned of payments to providers for hospital referrals they quickly acknowledged the wrongdoing and took positive steps to correct the problems,” said Derrick L. Jackson, Special Agent in Charge of the Office of Inspector General for the U.S. Department of Health and Human Services.

In addition, the investigators involved in this case have stated that their office “prioritizes the investigation of improper financial relationships between healthcare providers and referral sources” to insure that unnecessary claims or other acts are not billed to Medicaid or other government welfare programs. The qui tam attorneys state each claim made to Medicaid should be based on the needs of the patient and “not the financial interests of their doctors.”

The qui tam settlement will resolve all alleged False Claims Act violations against Meadows Regional, with the attorneys involved hoping it will encourage future whistleblowers to speak up.