U.S. colleges and universities receive hundreds of billions of tax dollars each year. Much of that money is earmarked for research. Teaching hospitals get their fair share of tax dollars too, both from the federal government and states. All of that money is supposed to be spent wisely and not wasted. A new round of whistleblower lawsuits filed under the False Claims Act shows just how much waste there really is.
University Based Medicare / Medicaid Fraud
In late July of this year, the University of Pittsburgh Medical Center and several affiliates agreed to pay $2.5 million to settle Medicare fraud charges related to the hospital’s neurosurgery department. Prosecutors said “certain neurosurgeons employed by UPMC submitted claims for assisting with or supervising surgical procedures performed by other surgeons, residents, fellows, or physician assistants, when those neurosurgeons did not participate in the relevant surgeries to the degree required.”
One university hospital surgeon apparently billed for procedures not even performed.
Just weeks before, the Justice Department resolved another case against a university hospital, this one involving the University of Missouri – Columbia. Prosecutors there said some physicians certified and billed Medicare, Tricare and Medicaid for reviewing the X-rays and MRI images when, in fact, they had not reviewed them.
The university paid $2.2 million in that case. Unlike many healthcare fraud cases that involve billing for services not performed or overbilling, this case allegedly involved poor quality care. A statement released by the Defense Criminal Investigative Service said that veterans and service members were denied proper care.
In February of this year, Memorial Health University Medical Center (MHUMC) paid $9.9 million to settle claims it made illegal kickbacks to doctors who referred Medicare patients to the hospital. The hospital allegedly disguised the kickbacks as above market pay. The more Medicare patients brought in, the higher the pay.
The MHUMC case is noteworthy because the hospital had just paid $5 million to settle similar claims brought under the False Claims Act in 2008. MHUMC is affiliated with the Mercer University School of Medicine.
In March 2014, the Duke University Health System settled a False Claims Act lawsuit for $1 million. Like the Medicare fraud claims involving the University of Pittsburgh, prosecutors say that Duke billed Medicare and Medicaid at higher rates for procedures handled by physician assistants. Sometimes the hospital billed for people not even present when the surgeries were performed.
Once again, regulators claim that veterans may have received substandard care as a result of the fraud.
Universities and Grant Fraud
It’s not just university teaching hospitals that are paying millions to settle False Claims Act claims. Universities and colleges receive billions of dollars each to conduct government research. In our own practice, we often speak with whistleblowers who tell how every year grant administrators are in a yearend frenzy to spend every last dollar of grant money. Rather than return anything to taxpayers, many grant recipients think they are obligated to spend all their money, even if means spending the money improperly.
Earlier this year, Columbia University paid a $9.5 million False Claims Act settlement to resolve claims that the university overbilled the National Institute of Health on 423 different grants.
One of the biggest grant fraud settlements occurred last year when the Justice Department claimed that the University of Florida had improperly billed hundreds of different grants totaling approximately $1 billion.
In 2014, the University of California – Davis paid $500,000 to settle claims that it duplicated work on one grant that it had already been paid for by another grant. Instead of sharing their research information, UC- Davis thought it could get away with charging two different agencies for the same work.
Universities and the False Claims Act
Although universities remain important partners with the federal government, recent lawsuits show that the government is not afraid to intervene in whistleblower lawsuits brought against these institutions.
Under the False Claims Act, anyone with inside information about fraud involving government funds may be eligible for a cash award. Awards are generally 15% to 30% of whatever the government collects from the wrongdoers. In the cases above, that could mean awards of up to $6 million.
In addition to having inside “original source” information, the whistleblower must also be the first to report. Under the False Claims Act, that means filing a sealed lawsuit in federal court.
Interested in learning more? Our whistleblower lawyers have collected over $100 million in award monies for our clients. The next award could be yours.
For more information, contact attorney Brian Mahany at or by phone at (414) 704-6731 (direct). All inquiries are protected by the attorney – client privilege and kept confidential. We never charge for our services unless we recover an award for you. We also work hard to protect our clients from illegal retaliation.
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