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Jackpot: Florida doctor collects $12 million for blowing the whistle on referral fees

An orthopedic surgeon who sued a Florida non-profit hospital district under the False Claims Act will collect $12 million as his share of a $69.5 million settlement.

Dr. Michael Reilly sued the North Broward Hospital District under the qui tam provisions of the False Claims Act. 

The FCA allows private citizens to sue on behalf of the government for false claims and share in any recovery. 

Dr. Reilly will receive $12,045,655.51 from the $69.5 million recovery announced Tuesday.

When he filed his lawsuit in 2010, Dr. Reilly lived in Fort Lauderdale. He held staff privileges since 1989 at Imperial Point Medical Center, one of North Broward’s facilities.

North Broward is a non-profit special taxing district of the state of Florida that operates hospitals and other health care facilities.

It allegedly violated the False Claims Act by paying illegal referral fees to doctors who sent Medicare and Medicaid patients.

North Broward paid nine doctors it employed “compensation that exceeded the fair market value of their services,” according to the civil complaint Dr. Reilly filed in early 2010.

He alleged that certain cardiologists and orthopedic surgeons were overpaid in 2008 and 2009 by between $150,000 and $300,000 per year, based on an analysis of the doctors’ practices and the average compensation for similar doctors in the region.

North Broward paid the cardiologists about $1 million per year, and the orthopedic surgeons $1.3 million or more, the complaint alleged.

Their compensation arrangements allegedly violated the Stark Statute and the False Claims Act. The Stark Statute restricts the financial relationships between hospitals and doctors who refer patients to them.

“Improper financial rewards  given to physicians in exchange for patient referrals corrupts medical decision making and inflates health care costs,” Shimon Richmond of the U.S. Department of Health and Human Services-Office of Inspector General said. “Our agency will continue to root out such behavior from our health care system.”

The DOJ said the claims settled Tuesday “are allegations only, and there has been no determination of liability.”

The case was United States ex rel. Reilly v. North Broward Hospital District, et al., Case No. 10-60590 (S.D. Fla.).

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Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.

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