Hospital incentives lead to $85M settlement; whistleblower will get $21M

By John O'Brien | Mar 19, 2014

ORLANDO, Fla. (Legal Newsline) - A whistleblower will receive almost $21 million as a result of a recent False Claims Act settlement between the United States and a Daytona Beach, Fla.-based hospital system.

On March 11, the Department of Justice announced that Halifax Hospital Medical Center and Halifax Staffing agreed to pay $85 million to resolve allegations they submitted claims to the Medicare program that violated the Physician Self-Referral Law.

That law, also known as the Stark Law, forbids a hospital from billing Medicare for certain services referred by physicians who have a financial relationship with the hospital.

Whistleblower Elin Baklid-Kunz filed a qui tam complaint in 2009, and the United States decided to join her in the case in 2011. According to the United States' complaint, Baklid-Kunz is a Norwegian citizen and permanent resident of the U.S.

Baklid-Kunz was employed by Halifax Staffing as the director of physician services. Halifax first hired her in 1995.

The alleged fraud began in 2000. The defendants allegedly gave to six oncologists incentives that improperly included the value of prescription drugs and tests they ordered, which were billed to Medicare.

The defendants also allegedly paid three neurosurgeons more than the fair market value of their work.

In November, U.S. District Judge Gregory Presnell ruled the contracts with the oncologists violated the Stark Law.

In February, he denied the defendants' motion for judgment on the pleadings. A trial was to begin March 12, but the sides reached a settlement.

From Legal Newsline: Reach editor John O'Brien at jobrienwv@gmail.com.

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