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Missouri Hospitals to Pay $34 Million in Whistleblower Suit

Two southwest Missouri hospitals have agreed to pay $34 million to the Medicare program for alleged violations of the False Claims Act. The suit, filed by a whistleblower, claims the hospitals engaged in improper financial relationships with referring physicians.

The whistleblower lawsuit was filed Dr. Viran Roger Holder against Mercy Hospital Springfield and its affiliate Mercy Clinic Springfield Communities, which together operate a hospital, clinic and infusion center.

The hospitals, formerly known as St. John's Regional Health Center and St. John's Clinic, once employed Dr. Holden, who accused them of billing Medicare for chemotherapy services provided to patients who were referred to them by oncologists. These referring physicians were compensated based partially on a formula that evaluated the patient referrals operated by the defendant's infusion center.

Federal law restricts the financial relationships between hospitals and clinics and the physicians who refer patients to them. The preservation of the integrity of the medical services Medicare beneficiaries receive is the intention of this measure.

The US Department of Justice decided to take over the prosecution of Dr. Holden's case after conducting their own investigation.

"When physicians are rewarded financially for referring patients to hospitals or other health care providers, it can affect their medical judgment, resulting in overutilization of services that drives up the costs for everyone," said Acting Assistant Attorney General Chad A. Readler of the Justice Departments Civil Division. "In addition to yielding a recovery for taxpayers, this settlement should deter similar conduct in the future and help make healthcare more affordable."

"Patients are left to wonder whether their doctor's judgment has been tainted and motivated by financial interests," said Steven Hansen, Special Agent for the Department of Health and Human Services.

Under the qui tam provision of False Claims Act, private citizens can file suit on behalf of the Federal Government and share in any recovery. As his share of the total recovery under the act, Dr. Holden will receive $5.44 million as a whistleblower.

Any citizen who has knowledge of fraud against the US Government can file a lawsuit under the act. If successful in recovering money, the whistleblower can collect 15 to 30 percent whether through a settlement or judgment. Merely informing the government about a violation is not enough. A qui tam lawsuit must be filed. It is highly recommended that any person filing a suit retain a lawyer with experience in whistleblower cases to protect his or her rights and navigate the complex process.

In addition, California is one of several states that also have enacted state versions of the False Claims Act permitting whistleblowers to collect a "finder's fee" for reporting fraud in state, local and municipal contracting.

Vititoe Law Group has represented many whistleblowers including high profile cases. If you feel you have a case under the False Claims Act, contact Vititoe Law at 818-851-1886 for a free evalution.

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