University Of Miami To Pay $22M Settlement For False Claims: DOJ

MIAMI, FL — The University of Miami will pay a $22 million settlement amidst allegations that it violated the False Claims Act by ordering medically unnecessary laboratory tests and submitting false claims through its laboratory and off-campus hospital-based facilities, the Department of Justice said in a news release.

These allegations were initially brought forward by Jonathan “Jack” Lord, the former chief operating officer of UM’s Miller School of Medicine, in a 2013 whistleblower lawsuit, the Miami Herald reported.

According to court documents, the United States alleges that UM engaged in three practices that violated the False Claims Act.

The government said that UM knowingly engaged in improper billing relating to its hospital facilities. Medicare regulations allow medical systems to convert physician offices into hospital facilities as long as they meet certain requirements. When converted to hospital facilities, they’re billed at a higher rate to the Medicare program and its beneficiaries, and facilities are required to explain the financial impact of receiving their services to beneficiaries, the DOJ said.

UM converted multiple physician offices to hospital facilities, then sought payment at higher rates without providing the required notice to beneficiaries, even after being advised by a Medicare administrative contractor that its notice practices were deficient, the DOJ said.

The university also billed federal health care programs for medically unnecessary laboratory tests for patients who received kidney transplants at the Miami Transplant Institute, a transplant program operated by UM and Jackson Memorial Hospital, the government said.

Each time a patient checked into MTI, UM’s electronic ordering system triggered a pre-set “protocol” of tests to be run for the patient at UM’s laboratory, the DOJ said. The government said that several tests on the protocol for all kidney transplant patients were medically unnecessary and dictated by financial considerations rather than patient care.

The government also said that UM caused JMH to submit inflated claims for reimbursement for pre-transplant laboratory testing conducted at MTI. This violates related party regulations and limits the reimbursement a provider can obtain for tests performed by a related entity to that entity’s actual costs, the DOJ said.

UM did this by controlling JMH’s decision to purchase pre-transplant laboratory tests from UM at inflated rates in exchange for UM’s surgeons and Department of Surgery continuing to perform surgeries at JMH, according to allegations. In a separate agreement, the United States has reached a $1.1 million settlement with JMH relating to this conduct.

In addition to the civil settlement, UM has also agreed to enter into a corporate integrity agreement with the Department of Health and Human Services.

“Medical providers who submit fraudulent claims to our taxpayer-funded health care programs not only violate the public’s trust, they compromise the very integrity of these programs,” Acting U.S. Attorney Juan Antonio Gonzalez for the Southern District of Florida said.

Acting Assistant Attorney General Brian M. Boynton for the Justice Department’s Civil Division added, “Health care providers who charge for medically unnecessary services and knowingly violate billing rules contribute to the soaring cost of health care.”