50 Healthcare Industry Lawsuits, Settlements

The following is a roundup of lawsuit updates, court holdings and settlements that involve the healthcare industry and were reported in the last four months.

1. Dallas Physician Convicted in $3M Medicare Fraud Scheme
A federal jury in the Northern District of Texas convicted Joseph Megwa, MD, for his participation in a $3 million Medical fraud scheme.

2. LabMD Files Appeal in Federal Lawsuit Against FTC
Atlanta-based LabMD filed an appeal of a Georgia federal court's dismissal of its lawsuit alleging the FTC does not have the power to broadly regulate data security.

3. Appeals Court Upholds $6.1M Fraud Judgment Against BCBS of Michigan
A $6.1 million fraud judgment against Blue Cross Blue Shield of Michigan was upheld by the U.S. Court of Appeals for the Sixth Circuit.

4. $89M Judgment Entered Against Florida Oncologist in False Claims Act Case
An $89 million judgment was entered against Wasfi Makar, MD, for violations of the False Claims Act.

5. Supreme Court Will Not Review Athens Regional Medical Center Discrimination Suit
The U.S. Supreme Court declined to review a discrimination and retaliation case against Athens(Ga.Regional Medical Center brought by Joe Barnett, a former employee of the medical center.

6. Class-Action Suit Filed Against Health Care Service Corporation Over Misused Profits
A class-action lawsuit was filed against Chicago-based Health Care Service Corporation, a Blue Cross Blue Shield insurer, alleging the company has not upheld its nonprofit mission by improperly spending more than $5 billion in profits.

7. Calloway Labs Settles False Claims Act Case for $4.7M
Woburn, Mass.-based Calloway Laboratories agreed to pay $4.7 million for submitting false claims to Medicare and West Virginia's Medicaid.

8. Judge Rules Against HHS in 340B Drug Discount Suit
U.S. District Judge Rudolph Contreras ruled against HHS in a suit challenging a final rule from the agency expanding the 340B drug discount program to rural and cancer hospitals as outlined in the Patient Protection and Affordable Care Act.

9. Court Dismisses $50M False Claims Act Case Against Huron Consulting Group
The U.S. Appeals Court for the Second Circuit affirmed the dismissal of a False Claims Act lawsuit against Chicago-based Huron Consulting Group.

10. Class-Action Lawsuit Filed Against UnitedHealthcare For Alleged Mental Health Law Violation
A class-action lawsuit was filed against health insurer UnitedHealthcare alleging the company is acting in violation of the federal mental health parity law by improperly denying mental health and substance-abuse related claims.

11. Supreme Court Turns Away Suit Against Mercy Health Over Employee Facebook Posts
The U.S. Supreme Court rejected a request to review a case against Mercy Hospital Independence (Kan.) concerning whether Facebook posts accusing a supervisor of improper behavior are protected by law.

12. Judge Issues Sanctions Against Halifax For Destroying Files
A federal magistrate judge ordered sanctions against Daytona Beach, Fla.-based Halifax Health for destroying patient files that were to be produced as part of an ongoing legal battle, and threatened the medical center with additional sanctions for filing a "tardy and deficient" statement with the court.

13. King's Daughters Medical Center to Pay Nearly $41M in Landmark Case
Ashland, Ky.-based King's Daughters Medical Center agreed to pay the government $40.9 million to resolve allegations it made millions by performing medically unnecessary heart procedures on patients.

14. Medtronic Settles Physician Kickback Case for $9.9M
Minneapolis.-based Medtronic agreed to pay the government $9.9 million to settle allegations the company paid physicians kickbacks to induce them to implant pacemakers and defibrillators manufactured and sold by Medtronic.

15. LabMD Trial Delayed During House Oversight Investigation
An administrative law judge delayed trial in the case the Federal Trade Commission brought against Atlanta-based LabMD concerning a data breach.

16. New Jersey Diagnostic Testing Center Owner Sentenced in Anti-Kickback Case
Ashokkumar Babaria, MD, a radiologist who owned and operated Orange (N.J.) MRI, a diagnostic testing center, was ordered to forfeit more than $2 million in fraudulent claims, pay a $25,000 fine and was sentenced to 46 months in prison for bribing physicians for testing referrals.

17. HealthSouth Receives 7 Additional Subpoenas From DOJ
The Department of Justice issued seven more subpoenas to Birmingham, Ala.-based HealthSouth's hospitals in connection with a Medicare fraud investigation.

18. Illinois Supreme Court: Good Samaritan Act Doesn't Shield On-Duty Emergency Physicians
The Illinois Supreme Court held the Good Samaritan Act, which protects from liability physicians who have no obligation to treat a patient and volunteer to do so in an emergency situation, does not extend liability protection to on-duty emergency department physicians who do not bill for their services.

19. West-Ward Pharmaceuticals to Pay $10M in Medicaid Fraud Case
Eatonton, N.J.-based West-Ward Pharmaceuticals agreed to pay $10 million to resolve allegations the pharmaceutical company inflated prescription drug prices to overcharge Texas' Medicaid program

20. 3 New York Hospitals Face Class-Action Suit Over Medical Record Fees
Mount Sinai Hospital, Beth Israel Medical Center and Montefiore Medical Group Co-op City, all based in New York City, were named as defendants in a class-action lawsuit alleging the hospitals, along with Alpharetta, Ga.-based HealthPort Technologies — a company that provided document copying services to the hospitals — overcharged patients for copies of their medical records.

21. 3 Found Guilty in $15M Medicare Fraud Scheme in Detroit
A federal grand jury convicted a physical therapist, a physical therapy assistant and an unlicensed medical school graduate in a $15 million Medicare fraud scheme.

22. Court Dismisses Most of Class-Action Lawsuit From 2011 TRICARE Data Breach
A federal judge dismissed most of the TRICARE recipients from the class-action lawsuit filed against TRICARE and Science Applications International Corporation, a scientific, engineering and technology applications company, which was filed as a result of a 2011 data breach.

23. First Circuit Applies First-To-File Rule in False Claims Act Case
The First Circuit held when two False Claims Act whistle-blower complaints are filed arising out of the same underlying facts, the first complaint filed will preclude the second complaint.

24. New England Compounding Pharmacy Reaches $100M Settlement for Meningitis Outbreak
The compounding facility linked to a 2012 meningitis outbreak that killed 64 people agreed to a settlement of $100 million.

25. Dr. Tariq Mahmood Rescinds Guilty Plea, Gets Ready For Trial
Tariq Mahmood, MD, rescinded his guilty plea and hired a new attorney to represent him at his trial concerning his involvement in a Medicare and Medicaid fraud scheme from 2010 to 2013.

26. Federal Court Dismisses LabMD's Suit Against FTC
A federal court dismissed Atlanta-based LabMD's suit alleging the FTC does not have the power to broadly regulate data security and the FTC failed to inform LabMD of how its data security measures fell short relative to a data breach at the company.

27. FTC Wins Appeal, ProMedica Must Divest St. Luke's
The 6th U.S. Circuit Court of Appeals ruled in favor of the Federal Trade Commission and ordered Toledo, Ohio-based ProMedica to divest Maumee, Ohio-based St. Luke's Hospital on the basis of competition violations.

28. HMA's Medical Center of Southeastern Oklahoma to Pay $1.5M in False Claims Settlement
The Medical Center of Southeastern Oklahoma in Durant, and its parent company, Naples, Fla.-based Health Management Associates, agreed to pay $1.5 million to settle allegations the hospital billed the Oklahoma Medicaid program for surgical procedures that were not medically necessary.

29. 2 Ohio Valley Healthcare Providers to Pay $1M to Settle False Claims Allegations
St. Clairsville, Ohio-based Belmont Cardiology and its president, Devender Batra, MD, agreed to pay $1 million for their involvement in East Ohio Regional Hospital in St. Martins Ferry and Wheeling, W.Va.-based Ohio Valley Medical Center submitting false claims for prohibited referrals to Medicare.

30. Judge Recommends Throwing Out One Claim in $522M FCA Case
U.S Magistrate Judge Sonja F. Bivens recommended one of the six claims against Mobile, Ala.-based Diagnostic Physicians Group be thrown out because the government had not presented sufficient evidence to support the claim.

31. All Children's Hospital, Pediatric Physician Services, All Children's Health System to Pay $7M to Settle Stark Law Violations
All Children's Hospital, Pediatric Physician Services and All Children's Health System, three St. Petersburg, Fla.-based organizations, settled a whistle-blower lawsuit brought under the False Claims Act for $7 million.

32. Tuomey Ordered to Pay $70M While Waiting On Appeal
A federal district court in South Carolina ordered Sumter, S.C.-based Tuomey Healthcare System to pay $70 million to delay payment on the $237 million judgment previously entered against it until an appeal of the case is completed.

33. 9 Whistle-Blower Cases Filed Against HMA Transferred to D.C.
Nine qui tam False Claims Act suits accusing Naples, Fla.-based Health Management Associates and several of its subsidiaries of paying illegal kickbacks to physicians and encouraging medically unnecessary tests were transferred to a WashingtonD.C., federal court.

34. Erlanger Medical Center Kickback Suit Dismissed Due to Previous Public Disclosures
A Tennessee federal judge dismissed a whistle-blower's False Claims Act lawsuit against Chattanooga, Tenn.-based Erlanger Medical Center, ruling the suit was barred due to previous public disclosures about the alleged kickback agreements involved.

35. Hope Cancer Institute Settles Whistle-Blower Case For $3M
Hope Cancer Institute based in Kansas City and Raj Sadasivan, MD, the owner of the cancer institute, agreed to pay $2.9 million to resolve allegations they violated the False Claims Act by submitting claims to Medicare, Medicaid and the Federal Employee Health Benefits Program for drugs and services that were not provided to beneficiaries.

36. Valley Heart Consultants Settle False Claims Allegations for $3.9M
McAllen, Texas-based Valley Heart Consultants agreed to pay $3.9 million to settle a suit alleging violations of the False Claims Act.

37. Duke Health Reaches $1M Settlement in Fraudulent Billing Case
Durham, N.C.-based Duke University Health System agreed to pay $1 million to resolve allegations that it improperly charged Medicare and Medicaid.

38. American Family Care Settles False Claims Allegations
Birmingham, Ala.-based American Family Care agreed to pay the government $1.2 million to resolve False Claims Act allegations. 

39. Halifax Settled FCA Allegations for $85M, Announces DOJ
Daytona, Fla.-based Halifax Hospital Medical Center and Halifax Staffing agreed to pay $85 million to resolve allegations they violated the False Claims Act by submitting claims to Medicare that were in violation of the Stark Law.

40. Ex-Sacred Heart CEO Questions Prosecutors' Evidence in Kickback Case
Edward Novak, the indicted former owner and CEO of Chicago-based Sacred Heart Hospital, argued evidence gathered in an April 2013 search of the facility should be suppressed due to the alleged questionable credibility of federal prosecutors' key cooperating witness, whose testimony helped prosecutors obtain the search warrant.

41. West Penn Allegheny Health System to Pay $1.5M to Settle Kickback Allegations
Pittsburgh-based West Penn Allegheny Health System agreed to pay the government $1.5 million to settle False Claims Act allegations.

42. Memorial Hospital in Ohio Pays $8.5M to Settle Kickback Allegations
Memorial Hospital in Fremont, Ohio, agreed to pay the government $8.5 million to settle allegations that it violated the False Claims Act, the Anti-Kickback Statute and the Stark Law by engaging in improper financial relationships with referring physicians.

43. Novant Health Accused of Charging Millions in Excessive Fees on Retirement Plans
A class-action lawsuit was filed against Novant Health, alleging the healthcare provider charged excessive fees for its defined-contribution retirement plan.

44. Erlanger Files Federal Suit to Recover $20M Provided in Aid to Hutcheson Hospital
Chattanooga, Tenn.-based Erlanger Health System filed a federal lawsuit to recover the $20 million it allegedly issued Hutcheseon Medical Center under a previous management agreement.

45. Baptist Health Settles False Claims Allegations For $2.5M
Jacksonville, Fla.-based Baptist Health System agreed to pay $2.5 million to settle allegations its subsidiaries violated the False Claims Act.

46. Somerset Medical Center Settles Kickback Allegations
Somerville, N.J.-based Somerset Medical Center agreed to pay $435,640 to settle allegations it violated the Anti-Kickback Statute and False Claims Act by making improper rental payments to a cardiology group in exchange for referrals.

47. Amedisys to Pay $150M to Settle False Claims, Anti-Kickback, Stark Law Allegations
Baton Rouge, La.-based Amedisys, one of the country's largest providers of home health services, and its affiliates agreed to pay the government $150 million to resolve allegations brought under the False Claims Act.

48. HMA's Medical Center of Southeastern Oklahoma to Pay $1.5M in False Claims Settlement
The Medical Center of Southeastern Oklahoma in Durant, and its parent company, Naples, Fla.-based Health Management Associates, agreed to pay $1.5 million to settle allegations the hospital billed the Oklahoma Medicaid program for surgical procedures that were not medically necessary.

49. City of Chicago Sues J&J For Deceptive Painkiller Marketing
The City of Chicago filed suit against Johnson & Johnson and four other drug companies for allegedly creating drug addicts and driving up healthcare costs by using deceptive marketing practices to push consumers to use opioid painkillers.

50. Alleged Improper Marketing Costs GlaxoSmithKline $105M
The pharmaceutical company GlaxoSmithKline agreed to pay 44 states and the District of Columbia a total of $105 million to resolve claims the company violated consumer protection laws by marketing drugs for off-label uses.

More Articles on the False Claims Act:

4 Strategic Considerations in False Claims Act Lawsuits 
Trends in 2 Major Liability Risks in the Healthcare Industry
6 Findings on Recently Unsealed False Claims Act Cases 

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