Christiana Care Health System (CCHS) has agreed to pay the United States and the State of Delaware $3.3 Million to settle a whistleblower lawsuit that alleged that CCHS paid kickbacks to, and entered into improper self-referral relationships, with a physicians’ practice located in New Castle, Delaware.

The qui tam whistleblowers were represented by Marc S. Raspanti, Kevin E. Raphael, and Michael A. Morse, of the national whistleblower law firm of Pietragallo Gordon Alfano Bosick & Raspanti, LLP.

The “qui tam” whistleblower lawsuit alleged that during the period from January 1997 to February 2003 CCHS violated the Federal False Claims Act, Federal Anti-Kickback Statute, Federal Stark Law, the Delaware Anti-Kickback Statute, and the Delaware False Claims act by certifying, in claims submitted to Medicare and Medicaid, that CCHS was in compliance with all laws and regulations, when in fact CCHS knew, deliberately ignored, or recklessly disregarded the fact that: 

 (a) CCHS was paying fees to the physicians’ practice under an “evergreen” contract that was executed in 1989, which fees, in some cases, were multiples of what Medicare or Medicaid paid CCHS as reimbursement for those services, in order, as alleged, to illegally induce the physicians’ practice to make referrals to CCHS; and/or 

(b) Claims that CCHS submitted to Medicare and Medicaid were not reimbursable because CCHS and the physicians’ practice had an impermissible “financial relationship” as defined in the Stark Statute.

Attorney Marc S. Raspanti praised the courageousness of the qui tam whistleblowers in stepping forward and uncovering one of the largest false claims cases ever in the State of Delaware.  Raspanti added that “this is a landmark whistleblower case because it is one of the largest ever in the State of Delaware, and because it sends a strong signal to healthcare providers that kickbacks and lucrative self-referrals violate the law and will not be tolerated.”

Attorney Kevin E. Raphael also credited the successful resolution of the case to the strong partnership between the Relators and the federal and state prosecutors, including: United States Attorney David C. Weiss; Delaware Attorney General Joseph R. Biden, III; Assistant United States Attorneys Shannon T. Hanson and Seth M. Beausang; former Delaware Deputy Attorney General Daniel R. Miller; Lawrence M. Kutys, an auditor in the United States Attorney’s Office; and former Delaware HHS-OIG Special Agents Conrad J. Quarles and Edward J. McCusker.

Attorney Michael A. Morse commented that the goal of the Stark Law, Federal Anti-Kickback Statute and Delaware Anti-Kickback Statute is to ensure that a physician’s professional judgment in referring patients for health care services is not compromised by improper financial arrangements offered to that physician. 

The United States and the Commonwealth of Virginia have intervened in a False Claims Act suit in the Western District of Virginia against the Medicaid providers Universal Health Services Inc., Keystone Marion LLC and Keystone Education and Youth Services LLC, the Justice Department announced today. They did business as the Keystone Marion Youth Center, a residential facility in Marion, Va., that receives Medicaid funds to provide psychiatric counseling and treatment for boys ages 11-17.

This False Claims Act lawsuit was filed by several former therapists who worked at the Marion residential facility. The suit alleges that defendants provided sub-standard care to adolescents in violation of federal and state Medicaid requirements, falsified records to cover up their serious violations and filed false Medicaid claims. Under the False Claims Act, a health care provider that submits false or fraudulent claims to a federal health care program is liable for three times the government’s damages, plus a civil penalty for each false claim.

For more information:  http://www.justice.gov/opa/pr/2009/November/09-civ-1191.html