Duke and West Penn Allegheny Settle Million Dollar False Claims Accusations

Duke University Health System, Inc., in Raleigh, N.C., and West Penn Allegheny Health System, Inc., in Pittsburgh, Penn., have agreed to pay the U.S. government $1 million and $1.5 million respectively to settle claims that they violated the False Claims Act.

The allegations against Duke arose from a whistleblower (qui tam) lawsuit filed by Leslie Johnson, a former employee of Duke’s billing and collections service PRMO, LLC d/b/a Patient Revenue Management Organization. In the course of her work, Johnson allegedly discovered that Duke was overbilling Medicare, Medicaid, and TRICARE by both billing for services provided by physician assistants during coronary artery bypass surgeries when the physician assistants were acting as surgical assistants and unbundling claims connected with cardiac and anesthesia services that should have received one bundled payment. Under the False Claims Act’s rules for whistleblowers, Johnson will share in a portion of the $1 million returned to the government.

West Penn Allegheny Health System came forward voluntarily when it discovered that it had leased space to physicians at below-market rates and created a financial inducement for the physicians to refer patients to its hospital. Creating such financial incentives, even accidentally, is a violation of the Anti-Kickback Statute and Stark Law, and any reimbursement claims associated with these suspect referrals are considered improper by the government.

The Office of Inspector General of the Department of Health and Human Services was involved in both cases. The Duke case was handled by the Department of Justice (DOJ) Office for the Eastern District of North Carolina. The West Penn Allegheny case was handled by the DOJ Office for the Western District of Pennsylvania.