Halifax Health's Legal Defense Bills to Top $15M

Daytona Beach, Fla.-based Halifax Health has already spent $15 million fighting a 2009 whistleblower suit, and that amount is only expected to grow as the system faces a March trial date, according to a Daytona Beach News-Journal report.

The suit, brought by Halifax employee Elin Baklid-Kunz, accuses the 678-bed system of allegedly admitting patients inappropriately, allegedly billing Medicare for their services and having financial relationships with physicians that allegedly violated federal antikickback laws.

The Department of Justice joined the case in 2011, supporting some of the allegations — namely that the health system allegedly had illegal contracts with six oncologists and three neurosurgeons from 2005 through 2009, violating the Stark Law. Ms. Baklid-Kunz and her attorneys are still pursuing separate allegations that Halifax physicians improperly admitted patients and performed unnecessary back procedures.

In June, the DOJ asked Halifax to pay up to $600 million in damages and penalties. But the agency has filed new documents in federal court in Orlando and is now asking for $750 million to more than $1 billion in the case — an amount that could make the case one of the largest of its kind.

Under the False Claims Act, Ms. Baklid-Kunz could receive 15 percent to 25 percent of the money recouped by the federal government. Since potential damages are estimated to range from $725 million to $1.14 billion, that would leave a potential payoff of up to $285 million for the whistleblower and her attorneys, according to the report.

Halifax has hired six law firms to work on the case, including McDermott Will & Emery and Carlton Fields. The health system has also produced fliers, which were distributed to hospital employees and posted on the hospital's website, detailing its position on the case, according to the report.

A spokesperson for the health system said it would rather not be spending millions of dollars on its legal proceedings. "That's $15 million that is not being used for healthcare in the community, and under the current expense and budgeting challenges, that's a large amount of money," spokesperson John Guthrie said in the report. "We didn't have a choice. We were put into this situation. We have no choice but to defend ourselves."

Ms. Baklid-Kunz still works at Halifax as a director of physician services. She's hired a high-profile trial lawyer — L. Lin Wood, JD — and has also enlisted legal help from Wilbanks & Bridges as lead counsel and McQuade & Olsen.

More Articles on Halifax Health:

Potential Damages in Halifax Health Lawsuit Could Hit $1B
DOJ Wants Up to $600M From Halifax Health in Whistleblower Case
HMA, Halifax Health Compete to Partner with Bert Fish Medical Center in Florida

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