Miami hospital pays $14.2 million to settle whistleblower lawsuit for Medicare fraud

Dec. 19, 2006 -- Jackson Memorial Hospital has agreed to pay $14.2 million to the federal government to settle a whistleblower lawsuit involving false claims for reimbursement from Medicare and Medicaid.

Jackson Memorial, Florida’s largest Medicaid provider, was accused of keeping millions in overpayments from Medicare and Medicaid that the Miami hospital knew it should have returned to the federal and state programs

“Hospitals are required to return Medicare and Medicaid overpayments, whether the overpayments are the result of mistakes or intentional misconduct,” said Michael P. Brown, a San Francisco attorney whose firm, Phillips & Cohen LLP, represents the whistleblower. “It isn’t acceptable for a hospital to sit on overpayments for years and hope the government doesn’t notice.”

This is the sixth settlement stemming from the same “qui tam” (whistleblower) lawsuit, which so far has resulted in various hospitals paying the government a total of $51.7 million (including today’s settlement). Mark Razin, a former Medicare reimbursement consultant who lives in Laguna Beach, Calif., filed the whistleblower lawsuit in 1998 in federal district court in Los Angeles.

The government joined the qui tam lawsuit after investigating the allegations. The U.S. Attorney’s office in Los Angeles is leading the government’s work on the case.  Phillips & Cohen was assisted in the case by attorneys from the Washington, D.C., office of Heller Ehrman LLP.

There have been five previous settlements as a result of Razin’s whistleblower lawsuit:

  • Lovelace Health System, a wholly owned subsidiary of Cigna Corp. based in Albuquerque, New Mexico, paid $24.5 million to the federal government in 2002.
  • St. Joseph’s Hospital in Houston, Texas, paid the government $1.5 million in 2002.
  • Eisenhower Medical Center, located in Rancho Mirage, Calif., paid $8 million in 2005.
  • HealthSouth Bakersfield Rehabilitation Hospital in Bakersfield, Calif., paid $740,000 in 2005.
  • St. Elizabeth Regional Medical Center in Lincoln, Neb., paid $2.8 million in October.

Under the False Claims Act, private individuals may file qui tam lawsuits against companies that defraud the government. Liable companies pay as much as three times the government’s losses plus penalties for each false claim. When the government joins the case, whistleblowers are entitled to 15 percent to 25 percent of the government’s recovery.

Phillips & Cohen’s practice is devoted exclusively to representing whistleblowers in qui tam lawsuits. For more information about Phillips & Cohen's record, see P&C's Successful Whistleblower Cases.