Yet another hospital has paid millions to settle a whistleblower suit brought by a former insider.  For over a decade Barbara Schubert worked for the physician-recruiting subsidiary of All Children’s Health System.  She became a whistleblower, claiming that All Children’s Hospital, also a subsidiary of the All Children’s System, paid physicians for referrals.

Last April, the court told her to plead her case with more particularity, rejecting her blunderbuss contention that every single claim filed in connection with the overpayment scheme was a False Claim.  She came back with a more specific complaint, laying out the All Children’s program of overpaying physicians, overpaying in the purchase of physician practices, paying bonuses based on the number of procedures referred to All Children’s, and generally violating the Anti-Kickback Statute.  The court accepted the amended complaint.

The case was set for trial in April 2015, but this week All Children’s reached a settlement with the United States, Florida, and Ms. Schubert.  Under the settlement All Children’s will pay $7 million, with the United States and Florida receiving $4 million and $3 million, respectively, less the 26.5 percent that goes to Ms. Schubert.

The lessons for hospitals?  Don’t overpay physicians—whether in salaries, stipends, bonuses, or for the purchase of their practices.  And remember that any employee could become a whistleblower—especially one with knowledge about physician recruitment and compensation.

The case is Schubert v. All Children’s Health System, M.D. Fla., Case No. 8:11-cv-01687.

Today’s post was contributed by Norman G. Tabler, Jr.

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