Multi-Million Dollar False Claims Act Settlements Paid by a Medical Waste Company and a California Hospital System

In yet another case, a regulated medical waste management company by the name of Stericycle entered into a $28,500,000 settlement with the qui tam plaintiff and government.  The qui tam plaintiff was a customer relations specialist for Stericycle and noticed that Stericycle improperly increased its service fees to a number of government entities without their consent or without entering into new contractual agreements.  The illegal price increases amounted to approximately $13.5 million overpayment by the government to Stericycle.  Instead of litigating the case and potentially opening itself up to triple damages and penalties under the False Claims Act, Stericycle decided to settle the case without admitting to any wrongdoing.  This maneuver is becoming common as bad press and the potential for skyrocketing penalties incentivizes companies to enter into confidential settlements.

Further, last week, San Francisco based Dignity Health enter into a settlement with the U.S. Justice Department for $5.9 million to avoid litigating a law suit alleging Medicare overbilling.  The claims involved False Claims Act allegations that the hospitals improperly billed Medicare where the recipients received implantable cardiac devices without the hospitals’ complying with the required waiting period.  The allegations were brought by a cardiac nurse and a reimbursement consultant.  Many of the other cases discussed in our dedicated qui tam blog section show examples of the typical types of whistleblowers.

The Medicare coverage required that certain devices not be implanted before a waiting period following a heart attack or if the patient recently had heart bypass surgery or angioplasty.  Instead, the hospitals proceeded to hold the surgeries and accordingly improperly bill the Medicare program.  The reason for the waiting period is to give the heart enough time to improve its operation on its own before going into another surgery where the device would be implanted.  Recently, the U.S. Justice Department reported that it recovered $3.5 billion from false claims act cases in 2015.

If you witness any potential false claims (i.e. requests for reimbursement to the government, not actually rendering work when reimbursement is received, or receiving and knowingly retaining an overpayment) by your company, or you are retaliated against for voicing your concern about potential wrongdoing, immediate action is crucial.  Contact the experienced employment law attorneys at Stephen Danz & Associates for a free consultation to discuss your circumstances and legal options.