UM to pay $22M to settle whistleblower claims.
The University of Miami (UM) is set to payout $22 million in a civil settlement accusing the school of violating the False Claims Act by ordering medically unnecessary laboratory tests and submitting false claims through its lab as well as its off-campus facilities. The False Claims Act imposes penalties on those who defraud government programs and the Medicare fraud settlement effectively resolves allegations made in three lawsuits filed under the ‘whistleblower’ provisions of the act. UM also entered into a corporate integrity agreement with the Department of Health and Human Services (DHS).
UM Miller School of Medicine, Jonathan “Jack” Lord, filed an initial whistleblower lawsuit alleging Medicare fraud in 2013. In 2020, it was unsealed after seven years, revealing allegations the school’s healthcare system billed millions of dollars in unnecessary lab tests, hitting patients with hidden charges.
According to court documents, the government found UM engaged in Medicare fraud through improper billing practices related to organ transplant testing and violated Medicare rules requiring the facilities to notify patients and federal regulators in writing of any surcharges. Court documents state, “Medicare regulations allow medical systems to convert physician offices into Hospital Facilities provided they satisfy certain requirements. Billing as a Hospital Facility results in higher costs to the Medicare program and beneficiaries. Hospital Facilities are required to give notice to Medicare beneficiaries that explains the financial ramifications of receiving services at Hospital Facilities as opposed to physician offices.” Instead, “UM converted multiple physician offices to Hospital Facilities, and then sought payment at higher rates without providing beneficiaries the required notice.”
The allegations also stated that “UM billed federal health care programs for medically unnecessary laboratory tests for patients who received kidney transplants at the Miami Transplant Institute (MTI).” And, finally, “UM caused JMH to submit inflated claims for reimbursement for pre-transplant laboratory testing conducted at the MTI in violation of related party regulations, which limit the reimbursement a provider can obtain for tests performed by a related entity to that entity’s actual costs.”
“Health care providers who charge for medically unnecessary services and knowingly violate billing rules contribute to the soaring cost of health care,” said Acting Assistant Attorney General Brian M. Boynton for the DOJ’s Civil Division. “The department will investigate and hold accountable those who seek to profit at the expense of federal health care programs and their beneficiaries.”
“Medical providers who submit fraudulent claims to our taxpayer-funded health care programs not only violate the public’s trust. They compromise the very integrity of these programs,” added Acting U.S. Attorney Juan Antonio Gonzalez for the Southern District of Florida. “Our office will aggressively pursue investigations against all providers who knowingly violate these billing rules no matter their size.”
“Bilking the Medicare program and patients by charging for medically unnecessary services will always draw the attention of my office,” Special Agent in Charge Omar Pérez Aybar of the Department of Health and Human Services Office of Inspector General (HHS-OIG) promised. “Working with our law enforcement partners, our agents are committed to investigating alleged billing scams that result in tremendous costs to federal health care programs and its beneficiaries.”