FL Hospital Agrees to Partial Settlement in Qui Tam Case

Halifax Hospital Medical Center (“Halifax”) in Central Florida has tentatively agreed to settle certain allegations in a whistleblower’s qui tam lawsuit that it violated the Stark Law, but the remaining allegations of violations of the False Claims Act will be heard at a jury trial set for July.

According to the Orlando Sentinel, Halifax and the Department of Justice reached a tentative agreement to settle the claims relating to the payment of illegal kickbacks in violation of the Stark Law, just as jury selection was set to begin. The Orlando Sentinel reported that a source close to the case said the settlement amount was $85 million. If that figure is correct, it will be the largest amount paid for a Stark Law violation in history.

In 2009, a former compliance officer for Halifax, Elin Baklid-Kunz, filed the whistleblower litigation under the qui tam provisions of the False Claims Act. The whistleblower’s complaint alleged that Halifax violated the Stark Law and False Claims Act. The whistleblower alleged that the violations occurred when Halifax submitted false claims to government healthcare programs for hospital admissions and procedures that were not medically necessary, and billed for services provided as a result of referrals from physicians with whom Halifax had improper financial relationships.

Last November, U.S. District Judge Gregory Presnell granted partial summary judgment on the Stark Law violation claims, but denied summary judgment as to the amount of the damages caused by the Stark Law violations, and denied it as to claims brought under the False Claims Act. Judge Presnell found that Halifax violated the Stark Law when it submitted claims for designated health services provided to patients referred by six oncologists with whom the hospital had an improper compensation arrangement.

The government declined to intervene in the whistleblower’s allegations that Halifax submitted false claims to government healthcare programs in violation of the False Claims Act. The whistleblower’s remaining claims are set to be heard before an Orlando jury in July.

The whistleblower will be entitled to a percentage of the settlement amount, and any damages awarded on the remaining allegations, as her reward under the qui tam provisions of the False Claims Act.

The trend is growing in which the government does not intervene in a pending case or only intervenes as to some claims. This leaves the relator needing to have his or her own counsel pursue the case or part of the case on behalf of the relator. This puts the burden on the relator to ensure his or counsel has the experience, will, and resources to litigate a qui tam case. Our firm has experienced former federal prosecutors and board certified business litigators that have the skills and know-how to do just that. To read about our experience and background, click here.

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