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Massachusetts Eye and Ear to Pay $5.7 Million in False Claims Act Settlement

May 24, 2023

On May 24, 2023, the United States announced a False Claims Act settlement with Massachusetts Eye and Ear Infirmary (“MEEI”) and other defendants. The False Claims Act settlement requires Massachusetts Eye and Ear to pay $5.7 million, plus interest.  It resolves a federal investigation into defendants’ compensation practices for physicians employed at MEEI clinical locations. A qui tam case brought by our client – a physician who formerly worked at MEEI – prompted the investigation.

Massachusetts Eye and Ear Compensation Arrangements Violated The Stark Law and The False Claims Act

MEEI has its principal location in Boston and maintains additional clinical locations throughout Massachusetts. Defendant Massachusetts Eye and Ears Associates (“Associates”) is a physician group of specialists providing medical services at MEEI locations.

Our client filed the qui tam case in 2018. The ensuing government investigation revealed that compensation for some physicians violated the physician self-referral law or “Stark Law.” These questionable arrangements involved 44 of the approximately 240 physicians working at MEEI locations. MEEI made “incentive payments” to Associates, from which Associates in turn paid some to its physicians who were referring Medicare patients to MEEI for outpatient procedures.

The Stark Law, 42 U.S.C. 1395nn, generally prohibits patient referrals where the referring physician has a financial interest in the health care provider or entity to which the patient is being referred. The law prohibits physicians from making referrals that benefit themselves financially unless one of the law’s exceptions applies.  When providers like Massachusetts Eye and Ear violate the Stark Law and bill the government, those bills violate the False Claims Act.

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.

Our Client Alerted the Government to this Fraud And Will Receive A Share of The Government’s Recovery

Our whistleblower client brought Massachusetts Eye and Ear to the government’s attention in 2018 by filing a qui tam whistleblower lawsuit, alleging violations of the False Claims Act.

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. If the case is successful, the relator is entitled to a share – between 15% and 30% – of the government’s recovery.

Whistleblower Law Collaborative LLC attorneys David W.S. Lieberman and Linda Severin commended the outstanding efforts of the government and applauded their client’s willingness to risk coming forward.  Ms. Severin stressed the skillful work done by Assistant U.S. Attorneys Assistant Steven Sharobem and Charles B. Weinograd of Acting United States Attorney Joshua Levy’s Affirmative Civil Enforcement Unit.

Whistleblower Law Collaborative

This Massachusetts Eye and Ear settlement is our most recent successful False Claims Act case. The Whistleblower Law Collaborative LLC is a top whistleblower firm. We devote our practice entirely to representing clients in bringing actions under the federal and state False Claims Acts and other whistleblower programs.  Law360 named WLC a Health Care Group of the Year for 2022.  Also, this past year, False Claims Act and SEC matters that we brought on behalf of clients returned over $300 million in settlements and recoveries to the government.