Florida hospital district pays $69.5 million to settle fraud case and whistleblower doc to get $12 million.

North Broward Hospital District, a special taxing district of the state of Florida that operates hospitals and other health care facilities in the Broward County, Florida, area, has agreed to pay the United States $69.5 million to settle allegations that it violated the False Claims Act by engaging in improper financial relationships with referring physicians, the Justice Department announced today.

The settlementends allegations that the hospital district provided compensation to nine employed physicians that exceeded the fair market value of their services.  The United States contended that these agreements violated the Stark Statute and the False Claims Act.  The Stark Statute restricts the financial relationships that hospitals may have with doctors who refer patients to them.

The allegations settled today arose from a lawsuit filed by a whistleblower, Dr. Michael Reilly, under the qui tam provisions of the False Claims Act.  Under the act, private citizens can bring suit on behalf of the government for false claims and share in any recovery.  Dr. Reilly will receive $12,045,655.51 from the recovery announced today.

This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $25 billion through False Claims Act cases, with more than $16 billion of that amount recovered in cases involving fraud against federal health care programs.

Jeffrey Newman represents whistleblowers. Not this one, however.