- Carondelet Health Network, which runs St. Mary's and St. Joseph's hospitals in Tuscon, AZ, will pay a $35-million settlement to resolve allegations of Medicare fraud. The penalty is the largest of its kind in the state's history. $6 million will go to the whistleblower who brought suit.
- The suit alleges that between 2004 and 2011, the hospitals charged Medicare, the Federal Employee Health Benefit Program and the Arizona Health Care Cost Containment System for non-reimbursable inpatient rehabilitation services, to the tune of unspecified millions of dollars. The hospital network has admitted to no wrongdoing but has settled in order to end the complaint.
- Carondelet, a nonprofit, is the area's largest Catholic system, employing 4,300 people. Its budget totaled $493 million in 2012.
The whistle-blower, Jacqueline Bloink, has been identified as the president of a healthcare compliance consulting and fraud investigation firm. Bloink filed a civil complaint against the health system in 2011 in the District Court in Tuscon, at which point the Justice Department stepped in, claiming that Carondelet had "knowingly and falsely billed" government agencies.
"This settlement is the largest-ever False Claims Act recovery in Arizona," U.S. Attorney John Leonardo said. "It reflects the longstanding and ongoing efforts of our office to guard the vital but limited funding of federal healthcare programs."
As Healthcare Dive previously reported, False Claims suits filed in conjunction with the Justice Department generally produce settlements—in fact, of all cases the department jointed between 1987 and 2010, 95% produced settlements or judgments against hospitals. Increased value is being placed on cost transparency across the industry, and given that playing whistleblower on these kinds of cases can be a pretty lucrative business, hospitals can expect that this trend is unlikely to reverse.
Want to read more? You may enjoy this story about a LA doctor that made a fortune suing his fellow providers for fraud.