Methodist Le Bonheur calls potential for US intervention in fraud suit 'abusive'

Attorneys representing Methodist Le Bonheur Healthcare are asking a federal court to prevent the Justice Department from intervening in a false claims lawsuit filed by whistleblowers against the Memphis, Tenn.-based health system, according to the Commercial Appeal.

In an Oct. 22 filing, attorneys for Methodist said the Justice Department waited too long to file its motion to intervene and that they failed to show "good cause."

"The United States' request to intervene 54 months after the case was filed and 25 months after its declination is abusive, and late intervention would be prejudicial to Defendants," attorneys for Methodist wrote. "Under such circumstances, the Court should deny the United States' motion."

When the Justice Department filed its motion to intervene in the case Oct. 8, it said it found new and substantial evidence to support the case. Methodist attorneys dispute that there were substantial new findings since the Justice Department's initial decision to not take on the case. 

The original whistleblower lawsuit, filed in 2017 and unsealed in 2019, alleges that Methodist paid kickbacks that allowed Memphis-based West Clinic's outpatient treatment centers to become part of Methodist Le Bonheur and allowed West Clinic to manage inpatient and outpatient adult care at Methodist Le Bonheur. The plaintiffs claim that one purpose of the payments was to induce referrals from oncologists and other medical specialists at West Clinic to Methodist Le Bonheur.

The lawsuit claims that physicians at West Clinic were given kickbacks for referrals of cancer patients for hospital admissions, chemical infusions, radiation and certain outpatient procedures.

The scheme allegedly took place from 2012 to 2018, with Methodist Le Bonheur allegedly paying more than $400 million in kickbacks to West Clinic, the lawsuit claims. Additionally, the lawsuit claims that the scheme resulted in $800 million in fraudulent claims being submitted to Medicare.

In the motion to intervene, the Justice Department states it is seeking damages on allegations that Methodist Le Bonheur knowingly paid kickbacks and submitted false claims to federal healthcare programs, including Medicare and Medicaid.

The plaintiffs in the case, two former Methodist executives, said they strongly support intervention by the U.S. The executives were the former CEO of Methodist University Hospital and the former dean of the School of Medicine at University of Tennessee Health Science Center.

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