In May 2023, the United States settled a False Claims Act case that our client brought against Massachusetts Eye and Ear Infirmary (“MEEI”) and other defendants in 2018. Our client alleged that some of the physicians working for Massachusetts Eye and Ear received kickbacks to induce referrals to MEEI for outpatient procedures in violation of the Stark Law, the Anti-Kickback Statute (“AKS”), and False Claims Act. The False Claims Act settlement requires Massachusetts Eye and Ear to pay $5.7 million, plus interest. A portion of MEEI’s payment will be paid to our client.
Massachusetts Eye and Ear made improper incentive payments to certain physicians. As a result, these financial relationships violated the Physician Self-Referral Law (commonly known as the Stark Law) and the Anti-Kickback Statute (“AKS”). Therefore, when the physicians referred their patients to MEEI for procedures and MEEI submitted claims to government health care programs such as Medicare, it violated the False Claims Act.
Under the terms of the False Claims Act settlement, MEEI will pay $5.7 million plus interest to the settlement.
Our client provided government prosecutors with information about the alleged fraud. In 2018, we filed a qui tam complaint under the federal False Claims Acts. Under the False Claims Act, a private citizen (known as a “relator”) who suspects or knows of fraud against the government can act as a whistleblower and file a sealed complaint on behalf of the government. For successful cases, the government pays a share – between 15% and 30% – to the relator. In this case, our client will receive 17 percent of the recovery.
Here, the United States contended that MEEI’s incentive payments created a financial relationship between MEEI and those physicians. Because of that financial relationship, referrals by those physicians to MEEI were improper and violated the Stark Law.
Stark Act violations drive up the overall costs of the health care system due to fraud and abuse. We will continue to vigorously investigate False Claims Act violations arising out of improper financial relationships between hospitals and physicians.
–Acting United States Attorney Joshua Levy.
We all rely on our health care providers to make treatment decisions based on clinical needs, not financial ones arising out of improper relationships between physicians and hospitals. Today’s settlement with Massachusetts Eye and Ear demonstrates the FBI’s ongoing commitment to ensure that publicly funded health care programs to which we all contribute and on which we all depend are not abused.
— Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division.
In announcing the settlement, Phillip M. Coyne, Special Agent in Charge of the Department of Health and Human Services, Office of Inspector General (HHS-OIG) said:
This settlement is a warning to other health care entities that seek to boost their profits by entering into improper financial arrangements with referring physicians. Working with our law enforcement partners, we will continue to investigate such deals to prevent financial arrangements that could undermine impartial medical judgement, drive up health care costs, and corrode the public’s trust in the health care system.
The Whistleblower Law Collaborative LLC, based in Boston, devotes its practice entirely to representing clients nationwide in bringing actions under the federal and state False Claims Acts and other whistleblower programs. Among the firm’s many successes is a $234 million settlement with Mallinckrodt under federal and state False Claims Acts for Medicaid rebate fraud.