Suing the Hand that Feeds You

Jeffrey Jacobs alleges that Idaho’s Pocatello Hospital violated the False Claims Act because of physician recruitment contracts that were overly generous to his practice group.  Jeff should know because he was recruited under one of the contracts and worked for the group for three years.

According to the complaint, the overpayments took the form of the hospital’s “reimbursement” payments to the practice group for costs that were below the reimbursement payments or were nonexistent.  Jeff alleges, for example, that when he was hired, the hospital “reimbursed” the practice for the extra office space he would take up, when actually he didn’t take up any extra office space.

On Sept. 28 the federal district court for Idaho rejected the hospital’s arguments for dismissal, upholding Jeff’s theory that if his allegations are correct, the hospital’s payments violated the Stark Law and the Anti-Kickback Statute; and that would mean the hospital violated the False Claims Act because its Medicare and Medicaid claims implicitly certified compliance with those statutes.

The case is U.S. ex rel. Jacobs v. CDS, P.A., et al., No. 4-14:cv-00301-BLW (D. Id.).

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