On July 21, 2014, the Department of Justice (DOJ) announced that Mobile, Alabama-based Infirmary Health System Inc. (IHS), two IHS-affiliated clinics and Diagnostic Physicians Group P.C. (DPG) have agreed to pay the United States $24.5 million to settle allegations that they violated the False Claims Act by paying or receiving unlawful financial inducements in connection with claims to the Medicare program. DOJ also announced that the whistleblower who brought the fraud to the government’s attention through a qui tam lawsuit, Dr. Christian Heesch, a physician formerly employed by DPG, will receive $4.41 million as his reward for reporting the Medicare fraud.

Dr. Heesch, originally filed the qui tam lawsuit under the whistleblower provisions of the False Claims Act, which makes it unlawful for a person or company to defraud governmental programs, such as Medicare. The lawsuit alleged that defendants violated the Physician Self-Referral Statue (a.k.a. Stark Laws) and the Anti-Kickback Statue, which generally prohibit healthcare providers for receiving payments or gifts, or entering into certain types of financial arrangements, in exchange for referrals of patients who are covered by Medicare. Violations of those statutes can, under some circumstances, also lead to violations of the False Claims Act, because healthcare providers who submit claims to Medicare make express or implied representations to the government that they have complied with those statutes.

According to the lawsuit, the government alleged that two IHS affiliated clinics had agreements with DPG to pay the group a percentage of Medicare payments for tests and procedures referred by DPG physicians. The Stark Law and the Anti-Kickback Statue were enacted to prevent this type of practice and to ensure that patients receive quality medical care based on a physician’s best judgment and not based on kickback incentives.

The whistleblower, Dr. Heesch, will receive a reward because he brought the defendants’ alleged Medicare fraud to the government’s attention through the filing of a qui tam lawsuit under the False Claims Act.  That statute provides that a whistleblower (technically known as the “relator” in the qui tam lawsuit) who follows certain specified procedures is entitled to between 15-30% of the monies recovered by the government.  In this case, the reward that Dr. Heesch reportedly will be paid represents an 18% share.