Citizens Medical Center, a county-run hospital located in Victoria, Texas, agreed to settle with the United States government to the tune of $21,750,000 in a False Claims Act whistleblower case. According to the US Justice Department, this settlement will resolve claims that the Citizens Medical Center allegedly engaged in inappropriate financial transactions with referring doctors.
Department of Justice Monitoring Health Care Providers on Physician Referrals
“The Department of Justice has longstanding concerns about improper financial relationships between health care providers and their referral sources, because those relationships can alter a physician’s judgment about the patient’s true health care needs and drive up health care costs for everybody,” stated the Principal Deputy Assistant Attorney General Benjamin C. Mizer from the US Justice Department’s Civil Division. “In addition to yielding a recovery for taxpayers, this settlement should deter similar conduct in the future and help make healthcare more affordable.”
Physicians Harish Chandna, Dakshesh-Kumar Parikh, Ajay Gaalla $5.98 Reward
Of the $21,750,000 the Citizens Medical Center owes the US government, $5.98 million of this money will go to the three whistleblowers: namely Dr. Harish Chandna, Dr. Dakshesh-Kumar Parikh, and Dr. Ajay Gaalla. The Citizens Medical Center also will pay the doctors combined lawyer fees of $1.8 million.
Dr. Harish Chandna, Dr. Dakshesh-Kumar Parikh, and Dr. Ajay Gaalla originally filed a lawsuit under the False Claims Act qui tam provisions. According to the three whistleblowers, the Citizens Medical Center allegedly offered money to cardiologists that overcharged patients for medical services. Dr. Harish Chandna, Dr. Dakshesh-Kumar Parikh, and Dr. Ajay Gaalla also claimed that the Citizens Medical Center offered bonuses to physicians who overcharged their emergency room patients.
These actions are considered to be a direct infringement of the False Claims Act and the Ethics in Patient Referrals Act or the Stark Act as it is more commonly known. These types of infractions can cause financial stress to both the government and taxpayers, and can compromise patient health as well.
Citizen’s Medical Center Attorney Says False Claims Settlement Smart Decision
According to the county’s attorney, money from the hospital's investments and revenues will be used to pay the settlement fee. He further stated that it would cost millions of dollars to continue fighting the allegations in court, and if there were a court trial and appeal, the process would cost several more hundreds of thousands of dollars. In turn, the attorney stated that the cost of the ongoing legal fees could threaten the hospital's financial stability, and that is the reason behind the decision to settle out of court.
This financial settlement signifies the end of a five year long legal process that involved the aforementioned lawsuit and another lawsuit that was previously settled three years ago. Filed in the year 2010, the same three doctors claimed that the hospital was involved with: (1) racketeering (2) conspiracy and (3) discrimination as a result of having their medical privileges at the hospital revoked. In 2012, Dr. Harish Chandna, Dr. Dakshesh-Kumar Parikh, and Dr. Ajay Gaalla were awarded $8 million from a settlement resulting from the discrimination claim.
DOJ Credits HEAT - Health Care Fraud Prevention and Enforcement Action Team
According to the US Justice Department, the latest lawsuit settlement showcases another achievement of the Health Care Fraud Prevention and Enforcement Action Team (HEAT). The team, itself, was formed by the Secretary of Health and Human Services and the Attorney General in May of 2009.
Since early 2009, the Justice Department has recovered over $24 billion through False Claims Act lawsuits and well over $15.3 billion of that total involved US health care program fraud.