There is something inherently wrong with paying a doctor to diagnose, treat
or prescribe based on his own financial interests, instead of his patient’s.
The Stark Act makes it illegal to pay a doctor to refer a patient to a
particular hospital or nursing home, or to prescribe a certain medication.
Think that would never happen? A Florida hospital paid $85 million in
the wake of accusations that it paid oncologists to send their patients
for cancer treatments.
I am a False Claims Act lawyer who represents whistleblowers in their
lawsuits to try to recover money taken from the federal government by
healthcare fraud. I have been describing the False Claims Act settlements and verdicts
from fiscal year 2014, and I am in the middle of a series on cases where
the allegations were that a hospital, home health agency, pharmaceutical
company, etc., violated the Stark Act by paying off doctors.
Halifax Hospital – $85 million
Whistleblower Elin Baklid-Kunz alleged that a Florida public hospital,
Halifax Health, had violated the Stark Act by paying oncologists to refer
cancer patients to the hospital. The hospital claimed it had done nothing
wrong, and the court battle raged for years. In the end, however, the
hospital settled the claims against it by paying the Government $85 million,
and Ms. Baklid-Kunz received $20.8 million of the award.
Elin Baklid-Kunz had been the director of physician services at Halifax
Staffing; at one point she was also the hospital’s compliance officer.
This past fall I was honored to sit at the same table as Ms. Baklid-Kunz,
as she received an award for Whistleblower of the Year. Each year the
Taxpayers Against Fraud Education Fund recognizes one of the men or women
who has had the integrity to stand up to fraud, despite the toll on his
or her relationships and livelihood.
According to Baklid-Kunz — and the Government, which intervened in
the case — Halifax was paying bonuses to medical oncologists based
on a percentage of their profit (net revenue minus expenses.) However,
Halifax was beefing up those bonuses by including the hospital’s
revenue from patients who were referred by those oncologists. In other
words, once the oncologist referred the patient, then everything that
the hospital did for the patient counted as revenue, and the doctor got
paid a percentage.
Ms. Baklid-Kunz and the Government pointed out that the oncologist was
not providing the care; instead, other doctors were treating the patient,
or pharmaceutical drugs were being sold to the patient by the hospital’s
pharmacy. Nonetheless, for purposes of the oncologists’ bonus pool,
the hospital counted the revenue. The bottom line, they said, was that
a physician made money by referring patients to the hospital — which
is what the Stark Act seeks to stop.
Baklid-Kunz gave a very moving speech about how it felt to be ostracized
and shunned in a job she had loved. She described what it felt like to
tell her boss that the bonus arrangement was illegal, but to be ignored.
Because she would not back down, she says the pressure on her grew. Other
employees became afraid to talk to her. She tried to meet a work friend
for a discreet lunch away from the hospital campus, but the friend was
spotted and her superiors warned her to stay away from Baklid-Kunz if
she cared about her job. Baklid-Kunz says she became isolated; even former
friends would not speak to her.
Baklid-Kunz filed the suit in 2009, and finally prevailed in 2014. Thanks
to her efforts, the U.S. recovered $85 million. As a taxpayer, I appreciate
and admire her bravery in pushing the case through despite the pressure on her.