Committee member of National Quality Forum settles False Claims Act case, paying $1 million

by bvernia | March 11th, 2015

On March 2, the Department of Justice announced that a Laguna Beach, California-based physician, Dr. Charles Denham, had agreed to pay $1 million to settle civil claims that he accepted kickbacks from CareFusion, Inc., to recommend the use of its product, ChloraPrep, for use by health care providers. Denham had been a member of the National Quality Forum’s Safe Practices Committee.

The case is unusual because of Denham’s ostensibly objective role in promoting best practices in health care. According to DOJ’s press release:

Dr. Charles Denham, of Laguna Beach, California, has agreed to pay the United States $1 million to settle allegations that he violated the False Claims Act by soliciting and accepting kickbacks, the Justice Department announced today.  Denham is a patient safety consultant who operates the consulting company Health Care Concepts Inc. and the research organization Texas Medical Institute of Technology, both of which are also parties to the settlement.  In 2009 and 2010, Denham was co-chair of the Safe Practices Committee of the National Quality Forum.

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The settlement resolves allegations that, under agreements entered into in 2008, Denham received monthly payments from CareFusion Corporation while serving as the co-chair of the Safe Practices Committee, which reviews, endorses and recommends standardized healthcare performance measures and practices.  The United States contended that Denham did not disclose to the committee, or any other individual or component of the National Quality Forum, that he was receiving payments from CareFusion.  The United States further contended that Denham solicited and received these payments in exchange for influencing the recommendations of the National Quality Forum and for recommending, promoting and/or arranging for the purchase of CareFusion’s product, ChloraPrep, in violation of the Federal Anti-Kickback Statute.  The United States alleged that this conduct caused the submission of false or fraudulent claims for ChloraPrep to federal health care programs.

The settlement follows closely on the heels of a January settlement of the same allegations (as well as off-label promotion of ChloraPrep) with CareFusion, for $40.1 million.

The National Quality Forum, previously announced that it had severed all ties with Denham.

The potential for innovative health care quality FCA settlements is growing, with the Affordable Care Act’s focus on quality as a basis for reimbursement.

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