Indiana University Health and Healthnet pay $18 million to settle kickback allegations

by Ben Vernia | May 17th, 2017

On April 27, the Department of Justice announced that Indiana University Health, Inc., and HealthNet, Inc., had agreed to pay $18 million to settle charges, initially brought by a whistleblower, the at the providers violated the kickback laws. According to DOJ’s press release:

The Department of Justice announced today that Indiana University Health Inc. (IU Health) and HealthNet Inc., have agreed to pay a total of $18 million to resolve allegations that they violated federal and state false claims laws by engaging in an illegal kickback scheme related to the referral of HealthNet’s OB/GYN patients to IU Health’s Methodist Hospital. Under the settlement agreement, IU Health and HealthNet each will pay approximately $5.1 million to the United States and $3.9 million to the State of Indiana.

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The Anti-Kickback Statute prohibits, among other things, the knowing and willful payment of any remuneration to induce the referral of services or items that are paid for by a federal health care program, such as Medicaid. Claims submitted to federal health care programs in violation of the Anti-Kickback Statute are also false claims under the False Claims Act.The United States alleged that from May 1, 2013 through Aug. 30, 2016, IU Health provided HealthNet with an interest-free line of credit, the balance of which consistently exceeded $10 million. United States further alleged that HealthNet was not expected to repay a substantial portion of this loan and that this financial arrangement was intended to induce HealthNet to refer its OB/GYN patients to IU Health’s Methodist Hospital.

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The Government announced that the whistleblower, who previously worked at HealthNet, would receive about $2.8 million of the federal portion of the settlement (a relator’s share of approximately 27.5%).

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