The U.S. Department of Justice filed its part of the lawsuit on Friday. It claims that Halifax Health defrauded the federal government by submitting thousands of false claims for Medicare and Medicaid payments worth millions of dollars. By filing, the U.S. Department of Justice hopes to recover millions of dollars in Medicare and Medicaid payments that it says were made in error to Halifax.
Elin Baklid-Kunz filed a lawsuit against Halifax in 2009. As a whistleblower, he could be awarded a percentage of whatever the government recovers. Generally, whistleblowers can be awarded 25 percent to 30 percent of the recovery. He claims Halifax overbilled Medicare by inappropriately admitting patients and had financial arrangements with some of its doctors that violated a federal anti-kickback law.
The federal Stark Law prohibits Medicare and Medicaid payments for hospital services that are prescribed by doctors who have profit-sharing agreements with the hospital. The law was made to ensure that referrals are made for medical reasons only, without financial motives.
However, according to the lawsuit, Halifax had agreements with its doctors that gave them a financial incentive to generate hospital revenues.
The Justice Department’s lawsuit focuses on doctors’ contracts, claiming that Halifax administrators “could not have reasonably concluded” the agreements to pay bonuses to doctors did not violate the Stark Law. Neurosurgeons at Halifax received generous incentive compensation that boosted their based salaries by hundreds of thousands of dollars. These neurosurgeons referred patients to Halifax and, between 2004 and 2010, Halifax charged Medicare more than $35 million for neurological services, the suit states. Each neurosurgeon individually generated over $2 million in profits for Halifax Hospital in 2009, according to the suit. The Justice Department claims a similar pattern existed with the hospital’s seven oncologists.
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