Cleveland Clinic has agreed to pay $21.25 million to settle a lawsuit alleging that its Akron General Health System improperly paid physician groups for patient referrals and submitted false claims to Medicare, according to the Justice Department.
Akron General's former director of internal audit Beverly Brouse acted as the whistleblower, suing the health system under the False Claims Act in 2015 in the U.S. District Court for the Northern District of Ohio. DOJ and Cleveland Clinic reached the settlement in May.
Brouse said she was fired in December 2015 after the Cleveland Clinic acquired Akron General and alleged that "for at least the past 5 years, [Akron General] engaged in a scheme to pay improper compensation to physicians to induce them illegally to refer patients, including Medicare, Medicare Advantage and Medicaid patients, to [Akron General] for inpatient and ancillary services."
That compensation was said to include "hefty annual salaries far over the fair market value of the services rendered," according to the complaint.
DOJ said Cleveland Clinic, which acquired Akron General in late 2015, voluntarily disclosed the compensation arrangements to the government, which were allegedly created by Akron General's leadership. The clinic said it discovered the compliance issues with some independent physician group contracts in early 2016.
"We are committed to compliance with healthcare laws and regulations throughout our organization, and every employee is responsible for following the standards of our code of conduct," Cleveland Clinic said in a statement.
Blouse's attorney Warner Mendenhall of Mendenhall Law Group called the settlement "a positive result" for both Brouse and taxpayers.
"We especially appreciate our client for her courage and work with investigators to recover federal funds. Beyond the great outcome, this type of work brings accountability to healthcare system and protects patients from fraudulent practices by their providers. Medical decisions should be about the patient and not financial arrangements," Mendenhall said in a statement.