Shands Healthcare Agrees to Pay $26 Million Settle False Claims Allegations

The Department of Justice has announced the settlement of federal and Florida false claims allegations against Shands Teaching Hospital & Clinics Inc., Shands Jacksonville Medical Center Inc., and Shands Jacksonville Healthcare Inc. (collectively, “Shands Healthcare”) relating to six hospitals located in central Florida.

Shands Healthcare has agreed to pay a total of $26 million, including $829,600 to the state of Florida, to settle allegations that Shands at Jacksonville n/k/a UF Health at Jacksonville, Shands at Gainesville n/k/a UF Health Shands Hospital, Shands Alachua General Hospital, Shands Lakeshore Regional Medical Center, Shands Starke Regional Medical Center, and Shands Live Oak Regional Medical Center submitted false claims to Medicare, Medicaid and TRICARE. Specifically, it was alleged that between 2003 and 2008, the six facilities knowingly billed government health care programs for inpatient procedures that should have been performed and billed as outpatient services resulting in the submission of millions of dollars in false claims.

The allegations were first made by whistleblower Terry Myers, the president of YPRO Corporation, a healthcare consulting firm. YPRO Corporation was hired by Shands Healthcare to conduct separate audits of the six facilities in 2006 and 2007. Mr. Myers filed a whistleblower lawsuit suit under the qui tam provisions of the False Claims Act in 2008. According to Mr. Myers, both audits revealed that the medical necessity rules of Medicare, Medicaid and TRICARE were not being followed with regard to inpatient admissions. The whistleblower claimed that he urged Shands Healthcare to self-report the violations to the government, and when it did not, he felt compelled to file the qui tam complaint.

The whistleblower will receive a percentage of the settlement proceeds as his reward under the qui tam provisions of the False Claims Act.