The U.S. Department of Justice is investigating Chicago-based Oak Street Health for possible violations of the False Claims Act, according to a regulatory filing Monday.
The Justice Department requested information from Oak Street on Nov. 1 on its arrangements with third-party marketing agents over the free transportation services the primary care provider offers to its adult Medicare patients, Oak Street said in the filing.
Oak Street said it plans to cooperate with the government.
"We are currently unable to predict the outcome of this investigation or whether litigation is probable," Oak Street said in the filing. "Regardless of the outcome, this inquiry has the potential to have an adverse impact on us due to any related defense and settlement costs, diversion of management resources and other factors."
The Justice Department did not respond to a request for comment, and Oak Street deferred to language in the filing about the investigation.
David McLean Jr., a partner at legal firm Hall Booth Smith, said investigations like this are not uncommon, and he expects to see more scrutiny of healthcare providers moving forward.
"The government has been increasingly engaging in some of these activities," McLean said.
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Often, the Justice Department learns of potential violations through data mining or when a whistleblower comes forward, McLean said. The investigations have been favorable for the government, resulting in billions of dollars in settlements. Whistleblowers also are entitled to some of the settlement.
While it's not a foregone conclusion that the Justice Department will determine that a provider is in violation of the False Claims Act, federal prosecutors "probably already made a preliminary determination" that a violation occurred before it sent Oak Street a civil investigative demand, McLean said.
In its filing, Oak Street said violations could lead to being removed from government healthcare programs, fines and penalties or repayments for patient services.
