Ms. Fitzgerald, a former Novation employee, alleges that improper sales practices and erroneous accounting are draining millions of dollars out of Medicare through overcharges or unauthorized uses. The suit claims that Novation received kickbacks from suppliers it was negotiating with. The cost of these kickbacks was passed on to the hospitals in the form of higher prices. These higher prices were then passed on to the government when the hospitals sought reimbursement from Medicare and Medicaid.
Both federal and Texas state authorities are currently investigating Ms. Fitzgerald’s allegations, but have not yet decided to join her suit.