Newark, Del.-based ChristianaCare is paying $47.1 million to resolve an over six-year-old kickback lawsuit filed by the health system's former chief compliance officer, Ronald Sherman, according to a Dec. 21 press release from Walden Macht and Haran, the lead counsel for Mr. Sherman.
Mr. Sherman filed the lawsuit in 2017, accusing ChristianaCare of infringing both anti-kickback laws and the False Claims Act through its relationship with Newark-based physician group Neonatology Associates.
In exchange for referrals to Christiana Hospital's neonatal intensive care unit, the health system gave free services from its employed nurse practitioners, physicians and residents to physicians employed by Neonatology Associates, according to the lawsuit.
The health system also allegedly took part in a "similar kickback scheme" involving urologic surgery, neurosurgery, cardiovascular surgery, and Christiana Hospital's ear, nose and throat practice.
"In 2003, the Accreditation Council for Graduate Medical Education – which is the body responsible for accrediting physician training programs in the United States – adopted new rules which limited the amount of hours hospitals could require medical residents to work," Dan Miller, partner at Walden Macht and Haran, said in the release.
"To fill the gap left behind by residents, many hospitals hired mid-level providers such as nurse practitioners and physician assistants. At ChristianaCare, we alleged that services performed by mid-level providers were billed for by private attending physicians who were in a position to make future referrals to the hospital. Put differently, we alleged that ChristianaCare paid kickbacks to the private physicians in the form of free employees," Mr. Miller said.
In what's thought to be the biggest Delaware False Claims Act settlement in history, the health system has agreed to pay over $12 million to Mr. Sherman, $42.5 million to both the U.S. and the state of Delaware, and $4.6 million to Mr. Sherman's attorneys, the release said.
"Following a favorable judgement by the court, which dismissed a portion of the claims, we are pleased to settle this matter as we focus forward on meeting the evolving health needs of the diverse communities we serve," a ChristianaCare spokesperson told Becker's.
"Our number-one priority is to provide the best possible care to every patient we serve. The settlement does not include admission of liability. The use of advanced-practice clinicians (APCs) to coordinate and provide continuity of care throughout our service lines is essential to enabling the level of high-quality, safe care that we provide. We will continue to ensure that our use of APCs to support the quality and safety of the care we provide to our patients is in accordance with all current guidance and requirements," the spokesperson said.