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, 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, the Federal Anti-Kickback statute, the 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 of the laws and regulations, when in fact CCHS knew, deliberately ignored, or recklessly disregarded the fact that:
- 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
- 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.
This settlement is one of the largest ever in the State of Delaware under the Federal False Claims Act and the Delaware False Claims Act. As part of the settlement, CCHS Will pay the United States $3.014 Million, and the State of Delaware $286,000. Additionally, CCHS entered into a Corporate Integrity Agreement with the Office of Inspector General of the United States Department of Health and Human Services (OIG-HHS).
The claims against CCHS were filed in April 2005 by two Wilmington, Delaware neurologists, individually and through their practice, as part of a qui tam lawsuit against the largest hospital in Delaware. See Docket No. 05-244 (United States District Court for the District of Delaware) (hereinafter the “Qui Tam Action”). The case remained under seal until late last week. Pursuant to the False Claims Act, Relators and their attorneys received 19.5% of the recovery, plus their attorneys’ fees and costs.
Attorney Marc S. Raspanti praised the courageousness of the quit tam whistleblowers in stepping forward and uncovering one of the largest false claims cases ever in the State of Delaware. Raspanti added: “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 OIG-HHS Special Agents Conrad J. Quarles and Edward J. McCusker.
Attorney Michael A. Morse commented that the goal of the Stark Law, the Federal Anti-Kickback statute, and the Delaware Anti-Kickback statute is to ensure that a physician’s professional judgment in referring patients for healthcare services is not compromised by improper financial arrangements offered to that physician.
The False Claims Act allows private persons (known as “relators”) to file a lawsuit against those individuals, businesses, and other entities that have directly or indirectly defrauded the federal government. Although the federal government can file its own False Claims Act lawsuit, the true success of the statute has come in cases that were filed by whistleblowers.
Pietragallo Gordon Alfano Bosick & Raspanti, LLP is one of the largest and most successful whistleblower law firms in the United States. Lawyers in the nationwide qui tam whistleblower practice of Pietragallo Gordon Alfano Bosick & Raspanti have represented whistleblowers in cases that have recovered more than $1 Billion for federal and state taxpayers. For more information about the False Claims Act, qui tam lawsuits, or the nationwide whistleblower practice of Pietragallo Gordon Alfano Bosick & Raspanti, visit www.falseclaimsact.com; www.pietragallo.com; or www.fraudwhistleblowersblog.com.