In The News

Indiana University Health and HealthNet Agree to $18 Million Settlement to Resolve Alleged False Claims Act Violations

Alleged violations of the Anti-Kickback Statute is a common theme among companies that are accused of governmental fraud. This fact was born out last month when Indiana University Health Inc. (IU Health) and Health Net, Inc. agreed to pay $18 million to resolve allegations that they violated state and federal false claims laws by engaging in an illegal kickback scheme related to the referral of IU Health’s OB/GYN patients to IU Health’s Methodist Hospital. Under the settlement agreement, IU Health and Health Net, Inc. agreed to pay $5.1 million to the United States and $3.9 million to the State of Indiana. “The payment of illegal remuneration to induce patient referrals interferes with health care providers’ independent judgment when they make referral decisions for their patients,” said Deputy Assistant Attorney General Joyce R. Branda for the Civil Division. “We will continue to pursue health care providers that engage in such conduct, which undermines public confidence in our health care system.”


The Anti-Kickback Statute (42 U.S.C. § 1320a-7b.) prohibits the knowing and willful payment of any remuneration to induce the referral of services or items that are paid by a federal health care program such as Medicaid, Medicare, TRICARE etc. Claims that violate the Anti-Kickback Statue are also false claims under the False Claims Act. The government alleged that from May 2013 through August 2016, IU Health provided HealthNet with an interest-free line of credit exceeding $10 million. The US further alleged that HealthNet was not expected to repay a large portion of this loan based on a financial arrangement between the two meant to induce HealthNet to refer its patients to IU Health’s Methodist Hospital.


“Helping to return millions of dollars in taxpayer funds to federal healthcare programs and the Indiana Medicaid program is critically important to me and my office,” said U.S. Attorney Joshua Minkler for the Southern District of Indiana. “Waste, fraud, and abuse can never be tolerated and tear at the fabric of first-class healthcare in this country.” The settlement came about as the result of a lawsuit that was filed by Dr. Judith Robinson, who formerly held a number of positions at both Methodist Hospital and HealthNet. Dr. Robinson filed her lawsuit in federal court in Indianapolis under the qui tam provisions of the False Claims Act. The qui tam provisions permit private individuals to bring a lawsuit on behalf of the government and to share in any subsequent recovery. Dr. Robinson is scheduled to receive approximately $2.8 million out of the federal share of the recovery. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services, at 800-HHS-TIPS (800-447-8477). If you have chosen to disclose wrongdoing it is also advised that you contact a qui tam attorney. A qui tam lawyer can advise you on such matters and will work to protect your rights under the law.