UPMC to pay $38M in whistleblower lawsuit settlement

PITTSBURGH — UPMC will pay $38 million to settle a 12-year-old False Claims Act lawsuit.

The settlement resolves a whistleblower lawsuit filed in 2012 by neurosurgeon J. William Bookwalter, neurophysiologist Robert Sclabassi, and surgical technologist Anna Mitina. It had a partial settlement in 2016.

The False Claims Act allows private citizens to file suit on behalf of the government to recover money back to the United States Treasury for false claims submitted to federal healthcare programs.

Under the Stark Law, hospitals are prohibited from submitting claims to Medicare and Medicaid for procedures, surgeries, and other services furnished pursuant to referrals from physicians who have a financial relationship with the hospital, unless the relationship falls within a statutory exception. Claims submitted in violation of the Stark Law are false claims under the False Claims Act, and any money paid on such claims must be returned to the government, a press release said.

“The Stark Law was enacted to ensure that the clinical judgment of physicians is not corrupted by improper financial incentives,” said Mark Simpson, of Simpson Law Firm. “Patients need and deserve to know that the hospital services they receive are the product of sound medical judgment, rather than motivated by the physician’s financial interests,” noted Steve Del Sole, of Del Sole Cavanaugh Stroyd.

Among other things, the allegations resolved by this settlement include that certain neurosurgeons were paid excessive compensation (well-above fair market value) by UPMC, and that those surgeons referred procedures and surgeries to UPMC in violation of the Stark Law, a press release said.

Dr. Bookwalter, Dr. Sclabassi and Ms. Mitina alleged that UPMC and its employed neurosurgeons engaged in fraudulent schemes that boosted both the neurosurgeons’ pay and UPMC’s revenues. They alleged that, under these arrangements, the neurosurgeons were financially incentivized to perform surgeries and other procedures at UPMC facilities because doing so led to higher compensation and resulted in more money for the hospital system.

“Whistleblowers play a critical and indispensable role in helping the government recover money that was improperly obtained, and this case is an excellent example of the impact of the whistleblower provisions of the federal False Claims Act, which empowers ordinary citizens to step forward, report fraud, and recover stolen funds on behalf of the United States,” said Jennifer Verkamp, of Morgan Verkamp LLC.

The $38 million settlement is believed to be one of the largest Stark Law recoveries in a False Claims Act case where the United States declined to intervene.

Channel 11 has reached out to UPMC for comment.

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