Monthly Archives: May 2013

Adventist Health to Pay $14.1 Million to Settle Federal False Claims Act Case Against White Medical Center

Amidst allegations that White Medical Center was paying physicians to refer patients to the facility, its owner agreed to pay $14.1 million dollars to the federal government and the State of California. Two doctors who knew of the scheme to gain more patients and fill hospital beds blew the whistle on the hospital and groups of physicians who benefitted by being paid in exchange for referring patients to the facility. Some of the illegal payments to these physicians groups included White Medical Center providing medical and nonmedical supplies and inventory to the referring physicians.

Adventist Health System/West, which was doing business as “Adventist Health” and its affiliated hospital White Memorial Medical Center, a Los Angeles teaching hospital has reached an agreement with the government to pay the large sum. According to the Sacramento Bee, the whistleblower lawsuit was filed in 2008 by two doctors with inside knowledge of the alleged fraud, and both the federal government and the state of California joined the lawsuit.

The United States Attorney’s Office released a statement describing the settlement.  In that statement, the Acting Assistant California Attorney General (Civil Division) wrote:  “Kickbacks and other unlawful financial arrangements cost taxpayer dollars and undermine the integrity of medical judgments.” “The Department of Justice is committed to making sure that physician referrals do not involve payments made in violation of federal law.”

“The settlement announced today underscores one of the key purposes of the Stark and Anti-Kickback laws – to ensure that the judgment exercised by health care providers is based on legitimate patient needs and is not influenced by illegal payments,” said Benjamin B. Wagner, U.S. Attorney for the Eastern District of California.

The settlement announced today resolves a lawsuit filed in the Eastern District of California under the qui tam, or whistleblower, provisions of the False Claims Act.   These provisions allow private citizens to bring civil actions on behalf of the United States and share in any recovery.   The whistleblowers in this case will collectively receive $2,839,219 of the recovery.  The lawsuit is captioned U.S. ex rel. Hector Luque et al. v. Adventist Health et al. No. 2:08CV1271 (E.D. Cal.).

The whistleblowers in this case faced ridicule, loss of hospital privileges and other possible repercussions from the hospital and their peers for coming forward.  Without these and similar whistleblowers, we as tax payers will continue to waste millions of healthcare dollars while legitimate patient and hospital bills are unpaid or underfunded. This case is another example of the need for medical personnel to come forward as whistleblowers to protect our system of government funded healthcare system.