Whistleblower Lawsuit Against Halifax Health Nears Resolution

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A potential resolution is in the works for a whistleblower lawsuit filed against Halifax Health. According to The Daytona Beach News-Journal, the case has cost the publicly supported company over $109 million. Last week, several sealed documents were entered into the court. Attorneys for Halifax did not specify the contents. A special meeting will be held by the Halifax Health Board of Commissioners; the public will be informed about a portion of the meeting to discuss litigation.

The whistleblower lawsuit, filed in 2009, alleges that short-term hospital stays from 2002 to 2013 were overcharged to Medicare. The suit also alleged that the hospital maintained illegal contracts with six cancer doctors and three neurosurgeons.

Halifax claims it did nothing wrong and has spent over $24 million in legal fees. In March, the hospital paid $85 million to settle claims involving physician contracts in March; the settlement also required Halifax to be subject to greater scrutiny by federal regulators over the next five years. In that settlement, the hospital admitted that the contracts violated the Stark Law.

Under the Stark Law, doctors cannot be paid based on volume and referrals. The U.S. Department of Justice, who joined the first part of the lawsuit, says that these types of contracts may lead to unnecessary treatments and tests.

The second portion of the lawsuit accuses the hospital of admitting patients improperly. Instead of keeping patients for observation status, the suit alleges, Halifax would admit them for short hospital stays of two days or less in order to get more money from Medicare. Halifax denies these allegations.

The hospital overcharged Medicare by $72.5 million, experts for the whistleblower calculated. This amount may potentially be tripled and have added penalties, based on the False Claims Act.