ChristianaCare sets aside $47M to settle C-suite whistleblower case

Newark, Del.-based ChristianaCare has reserved $47 million to settle a kickback lawsuit filed by a former member of its executive team, The Philadelphia Inquirer reported Sept. 29. 

Ronald Sherman — the health system's former chief compliance officer — filed the lawsuit in 2017, alleging ChristianaCare violated the False Claims Act and anti-kickback laws through its relationship with Neonatology Associates, a Newark-based physician group. 

The health system provided free services from its employed physicians, residents and nurse practitioners to physicians employed by Neonatology Associates in exchange for referrals to Christiana Hospital's neonatal intensive care unit, according to the lawsuit. This relationship allegedly began in 2010 and continued into 2014, when the Neonatology Associates physicians became ChristianaCare employees. 

According to the publication, under federal law, hospitals cannot pay physicians for referrals. 

The suit alleges ChristianaCare participated in a "similar kickback scheme" in neurosurgery, cardiovascular surgery, urologic surgery and Christiana Hospital's ear, nose and throat practice. 

In the year that ended June 30, the health system reported a $22.6 million operating income for the year, reduced by a $45 million reserve for the whistleblower settlement. An additional $2 million was previously set aside for the case, according to the report. 

The health system told Becker's it is unable to comment on this pending legal matter, but "look[s] forward to sharing information when and if a settlement is finalized."

Editor's Note: This story was updated Oct.3 at 8:44 a.m. to include a comment from ChristianaCare. 


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