Whistleblower receives $2.8 million for Reporting Illegal Kickback Scheme

KKC Staff

Published On: May 16th, 2017

Indiana University Health Inc. (“IU Health”) and HealthNet Inc., have agreed to pay a total of $18 million, approximately $5.1 million to the United States and $3.9 million to the State of Indiana, to resolve allegations that they engaged in an illegal kickback scheme related to referrals of HealthNet’s OB/GYN patients to IU Health’s Methodist Hospital.

The government alleges that from 2013 to 2016, IU Health provided HealthNet with a line of credit exceeding $10 million that HealthNet was not expected to repay a substantial portion of the loan. They further allege this kickback was used to induce HealthNet to refer its OB/GYN patients to IU Health’s Methodist Hospital.

Under the Anti-Kickback Statute, knowing and willful payments to induce referrals of services or items that are paid for by a federal health care program like Medicaid is prohibited. The submission of false claims to a federal health care program is also a violation of the False Claims Act.

“Helping to return millions of dollars in taxpayer funds to federal healthcare programs and the Indiana Medicaid program is critically important to me and my office,” said U.S. Attorney Joshua Minkler for the Southern District of Indiana. “Waste, fraud, and abuse can never be tolerated and tear at the fabric of first-class healthcare in this country.”

Dr. Judith Robinson, the whistleblower and former employee of both Methodist Hospital and HealthNet, will receive $2.8 million for providing crucial information that lead to the $18 million settlement.

The False Claims Act allows the whistleblower to receive a share of any funds recovered through the lawsuit. The False Claims Act is one of the most powerful tools to combat government contract fraud. Violators of the False Claims Act are liable for three times the dollar amount that the government is defrauded and civil penalties of $5,000 to $10,000 for each false claim. A qui tam plaintiff can receive between 15 and 30 percent of the total recovery from the defendant, whether through a favorable judgment or a settlement. The whistleblower must file a qui tam lawsuit to be eligible to recover money under the FCA. Merely informing the government about the violation will not qualify you for an award.Related Links: