In a Stark case where the whistleblower was on his own for the most part, UPMC Hamot, a hospital in Erie, Pa., and Medicor Associates, a cardiology group, agreed to pay $20.75 million to settle false claims allegations over lucrative medical directorships.

UPMC Hamot and Medicor Associates submitted claims to Medicare and Medicaid that allegedly were false because they violated the Stark Law and Anti-Kickback Statute, the Department of Justice said March 7. The settlement was revealed in November by the attorney representing the whistleblower and in a court order (RMC 11/20/17, p. 1), but DOJ intervened in the whistleblower lawsuit on Feb. 28 “to effectuate this Settlement Agreement.”

The whistleblower, cardiologist Tullio Emanuele, who was employed by Medicor from 2001 to 2005, filed the false claims lawsuit in 2010 and amended it in 2012. The alleged violations occurred before UPMC owned the hospital—then called Hamot Medical Center—which UPMC bought in 2011.

The whistleblower received 29% of the settlement amount, which is almost the maximum that can be awarded in non-intervened cases, says Houston attorney Adam Robison, with King & Spalding. “It’s reflective of the government acknowledging the amount of work and effort that was put into the case by the relator,” he notes. “It’s a fairly hefty share.”

The heart of the false claims complaint was the medical directorships. The whistleblower alleged, among other things, that the hospital paid for medical directorships without adequate documentation in violation of the Stark Law, which prohibits Medicare payments to entities for designated health services (DHS), such as hospital inpatient and outpatient services, if they were ordered by physicians who have a financial relationship with the entities, unless an exception applies.