Christiana Care Health Services will pay $47.1 million to settle a long-running ” whistleblower” case over alleged kickbacks to phyiscian practices.
It is believed to be the largest False Claims Act settlement in Delaware history.
The settlement had earlier been disclosed in financial filings from Delaware’s largest hospital system and largest non-government employer.
The healthcare system issued the following statement.
Following a favorable judgement by the court, which dismissed a portion of the claims, we are pleased to settle this matter as we focus forward on meeting the evolving health needs of the diverse communities we serve.
Our number-one priority is to provide the best possible care to every patient we serve.
The settlement does not include admission of liability.
The use of advanced-practice clinicians (APCs) to coordinate and provide continuity of care throughout our service lines is essential to enabling the level of high-quality, safe care that we provide. We will continue to ensure that our use of APCs to support the quality and safety of the care we provide to our patients is in accordance with all current guidance and requirements.
At ChristianaCare, we serve our patients with love and excellence. As a nonprofit health care organization with a mission of service to our community, we are committed to providing high-quality, safe care to everyone we serve, especially for critically ill newborns in our NICU.
Our high-quality care is nationally recognized; ChristianaCare is rated by Healthgrades as one of America’s 50 Best Hospitals and continually ranked among the nation’s best in national quality ratings.
“This case involves a revolutionary legal theory. To my knowledge, this is the first FCA settlement – ever – based on a hospital allegedly providing private physicians with free services in the form of hospital-employed nurse practitioners and physician assistants. Any other hospital in the country that operates under the model that led to this settlement should consider changing its practices immediately, or risk a whistleblower lawsuit,” said Dan Miller of Walden Macht & Haran, LLP, who served as lead counsel representing the whistleblower, Ronald Sherman.
The lawsuit, filed under the federal False Claims Act and Delaware False Claims and Reporting Act against Christiana Care Health Services, Inc., Christiana Care Health System, Christiana Hospital, and Wilmington Hospital agreed to pay $42.5 million to the United States and the State of Delaware and $4.6 million to the attorneys representing Sherman to settle the case. Sherman’s share of the settlement is $12,112,500.
Whistleblowers receive compensation under legislation aimed at rooting out fraud involving the two government health care systems.
The lawsuit alleged that ChristianaCare provided free employees for the benefit of private attending physicians, and that as a result, ChristianaCare gained millions of dollars in hospital bills paid by government health care programs including Medicaid and Medicare.
Sherman was the Chief Compliance Officer at ChristianaCare from 2007-2014 and conducted internal investigations of the conduct in question over a period of several years. Sherman’s lawsuit alleged that:
- Christiana employees provided most of the professional care and conducted many of the procedures for infants in the neonatal intensive care unit (NICU), while private neonatology physicians billed for and were paid for that care. ChristianaCare provided these free services in exchange for referrals of patients to ChristianaCare. Hospitals are not allowed to pay doctors for referrals under federal law.
- Similarly, ChristianaCare provided free services – in the form of professional care provided by Christiana-employed nurse practitioners and physician assistants – to private heart surgeons, ENT doctors, neurosurgeons, and urologists, also in exchange for referrals.
The Delaware Attorney General’s Medicaid Fraud Control Unit receives 75 percent of its funding from the U.S. Department of Health and Human Services under a grant award totaling $2,184,000.00 for Federal fiscal year 2024. The remaining 25 percent, totaling $727,996.00 for fiscal 2023 is funded by the State of Delaware.
