A six-year whistleblower lawsuit against Franklin, Tenn.-based IASIS Healthcare alleging the system used kickbacks to steer patient referrals has been dismissed, according to a system news release.
Former IASIS employee Jerre H. Frazier filed suit in 2005, claiming the system paid physicians for referrals through various strategies. These alleged kickback schemes included renting office space for a reduced cost, giving physicians medical directorships that involved little work, and paying more than fair market value to lease physicians' equipment, according to a news release from Mr. Frazier's representation.
The suit was dismissed with prejudice in 2008 when a U.S. district judge ruled Mr. Frazier had failed to state a claim under the False Claims Act. That decision was appealed in 2010. The appellate court agreed with the initial ruling, but ruled that Mr. Frazier could have one more chance to attempt to plead a viable case. He filed a revised complaint, which was again dismissed with prejudice. Mr. Frazier went on to appeal that third dismissal.
In a new development, Mr. Frazier agreed to voluntarily withdraw his appeal to that third ruling late last month. His counsel filed a motion to voluntarily dismiss his appeal yesterday, bringing an end to the suit.
"This was unfortunate litigation that we've now demonstrated never should have been brought. While our defense of this lawsuit has been costly, the stress-testing endured by our company through this process certainly has made us stronger," IASIS President and CEO Carl Whitmer said in the release.
The settlement agreement, which was approved last week, comes at no cost to IASIS and provides the system with all of the sanctions remedies it was seeking against Mr. Frazier except monetary sanctions, which he had proved an inability to pay.
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Former IASIS employee Jerre H. Frazier filed suit in 2005, claiming the system paid physicians for referrals through various strategies. These alleged kickback schemes included renting office space for a reduced cost, giving physicians medical directorships that involved little work, and paying more than fair market value to lease physicians' equipment, according to a news release from Mr. Frazier's representation.
The suit was dismissed with prejudice in 2008 when a U.S. district judge ruled Mr. Frazier had failed to state a claim under the False Claims Act. That decision was appealed in 2010. The appellate court agreed with the initial ruling, but ruled that Mr. Frazier could have one more chance to attempt to plead a viable case. He filed a revised complaint, which was again dismissed with prejudice. Mr. Frazier went on to appeal that third dismissal.
In a new development, Mr. Frazier agreed to voluntarily withdraw his appeal to that third ruling late last month. His counsel filed a motion to voluntarily dismiss his appeal yesterday, bringing an end to the suit.
"This was unfortunate litigation that we've now demonstrated never should have been brought. While our defense of this lawsuit has been costly, the stress-testing endured by our company through this process certainly has made us stronger," IASIS President and CEO Carl Whitmer said in the release.
The settlement agreement, which was approved last week, comes at no cost to IASIS and provides the system with all of the sanctions remedies it was seeking against Mr. Frazier except monetary sanctions, which he had proved an inability to pay.
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