Whistleblower Files Lawsuit Claiming Florida Hospital Network Operates Illegal Kickback Scheme

The Canary™: Qui Tam Whistleblower Blog

Braxton Padgett
Wednesday, 06 December 2017

A Florida hospital network is facing a lawsuit for allegedly orchestrating an illegal kickback scheme. According to a complaint filed in the United States District Court for the Middle District of Florida, the hospital network, Naples Community Hospital, Inc., substantially overpays physicians with the expectation that those physicians refer patients to Naples Community Hospital clinics and hospitals. These referrals in turn generate millions of dollars in revenue for NCH from Medicare and Medicaid payments in violation of federal anti-kickback laws. The complaint was filed in federal court in March and unsealed in November. Should NCH fail in defending this action, it will stand to lose substantial sums of money.

Whistleblowers claims that Naples Community Hospital, Inc. substantially overpays its doctors in exchange for referrals in violation of anti-kickback laws.

The whistleblower who brought the action against NCH, Dr. Eric Vensel, is an interventional radiologist that has practiced in the Naples area since 2006. When Dr. Vensel moved to Naples, he joined Naples Radiologists, P.A., which had a contract to provide all radiology services to NCH and co-owned several imaging centers with the hospital network. Dr. Vensel claims that sometime around 2010, NCH shifted to a strategy aimed at boosting its revenues through an illegal kickback scheme involving patient referrals. In establishing this scheme, NCH terminated its contract with Naples Radiologists, P.A. and employed the radiology services of a different radiology group. Dr. Vensel claims that NCH terminated the contract because Naples Radiologists, P.A. refused to cooperate. NCH wanted to send a message to the rest of the medical community about what would happen if physicians failed to acquiesce to NCH’s plan to control and increase referrals to NCH hospitals and clinics.

It was through these interactions that Dr. Vensel obtained knowledge about the illegal kickback scheme that NCH has established. As the complaint describes, some physicians employed by NCH were paid salaries well above the 90 percentile of physicians in the same field. This resulted in the hospital taking substantial losses, as these physicians did not bring in nearly as much money through their services as they were being compensated. However, these physicians were pressured to offset the losses through referrals or face the possibility of being terminated. NCH did in fact receive substantial referrals from these physicians, resulting in the hospital networking receiving millions of dollars in payouts from Medicare and Medicaid. Dr. Vensel argues that the excessive salaries, as well as other non-monetary benefits that these physicians received, were essentially kickbacks for the referrals that the physicians were providing. This is in violation of the federal Stark Law, which prohibits referrals by physicians to an entity providing health care services if the physician has a financial relationship with that entity. Yet NCH submitted thousands of claims to the federal government for Medicare and Medicaid payments and certified its compliance with anti-kickback laws.

A successful whistleblower action under the False Claims Act can be costly for a company, as the U.S. government is entitled to treble damages.

A whistleblower lawsuit, like the one that NCH is now facing, can be extremely costly for a company. In additional to certain penalties, a whistleblower action under the Federal False Claims Act entitles the U.S. government to treble damages. Should Dr. Vensel succeed in this action, NCH will have to pay out far more money than it ever received through this kickback scheme. Dr. Vensel will also be entitled to a percentage of the fines imposed on NCH.

If you are someone who is preparing to file a whistleblower claim yourself, there are several things you should consider:

  • Maintain evidence. Immediately identify and preserve any evidence of the misconduct.
  • Log any acts of retaliation. If you have been retaliated against in relation to a whistleblower action, log all incidents and maintain any relevant evidence.
  • Seek the help of an experienced attorney. An attorney versed in the law surrounding whistleblower actions can guide you along the way and ensure that your claim is properly filed and litigated.

If you are considering filing a whistleblower action and would like to receive more information about the ways in which we can help you, please Contact Us.

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