Corporation In Charge of Long-Term Care Hospitals Agrees to $7.5 million False Claims Act Settlement

On October 3, 2011, counsel for whistleblower and qui tam Plaintiff Beatrice Maitland announced the settlement of False Claims Act allegations against a subsidiary of Select Medical Corporation for suspect “Medical Director” payments made to various physicians.  Specifically, Select Specialty Hospital–Columbus, Inc. agreed to pay $7.5 million to settle claims that it submitted claims to Medicare for reimbursement based on illegal referral fee agreements between certain Select Medical Corporation hospitals and physicians who were “Medical Directors” at the hospitals that amounted to kickbacks, as well as claims for excessive fees not justified by the care provided.

In addition to the monetary settlement, and in an effort to prevent future wrongdoing, the government further required all hospitals in the Select Specialty Hospital System to enter into “Corporate Integrity Agreements” with strict reporting and monitoring requirements.  Ms. Maitland filed her suit in September 2007 under the qui tam provisions of the False Claims Act, which allow private citizens to bring suit on behalf of the federal government and, if successful, share in the recovery.  Under the settlement agreement, Ms. Maitland will receive 18% of the total settlement, or $1,350,000.

The case is United States ex rel. Beatrice Maitland v. Select Medical Corporation, et al., No. 2:07CV927 (S.D. Ohio).