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Tulare Health Agencies Agree to Pay Over $2.4 Million to Settle Civil Lawsuit Alleging False Medicare Claims

LawFuel.com – 28 July, 2009 – Tulare Local Healthcare District, Tulare District Healthcare System and Tulare District Hospital (collectively, “Tulare Healthcare”) have agreed to pay more than $2.4 million to settle allegations that they submitted claims to the Medicare system as part of a scheme to illegally reimburse doctors who referred patients to Tulare Healthcare.

The settlement, under which Tulare Healthcare is expected to pay the government $2,411,030.14 tomorrow, was announced today when the United States Attorney’s Office learned that United States District Judge Christina Snyder had unsealed a “whistleblower” lawsuit filed last year by Maria Lucy Reimche, Tulare Healthcare’s former chief financial officer. Reimche’s lawsuit alleged that Tulare Healthcare made prohibited remuneration to physicians who referred Medicare patients to Tulare Healthcare. The doctors who allegedly received prohibited remuneration from 2001 through 2007 were given rental arrangements at below-market rates, were able to purchase commercial real estate lots at below-market value, and had debts forgiven. The lawsuit alleges that when Tulare Healthcare made claims to Medicare for reimbursement for services provided to the patients that had been referred, it violated the federal False Claims Act, as well as the federal Anti-Kickback Statute and an anti-referral law known as “the Stark law.” The Anti-Kickback Statute prohibits anyone from offering, paying, soliciting or receiving anything of value to generate referrals for items or services payable by any federal health care program. The Stark law provides that, subject to certain exceptions, a physician may not refer patients for specified Medicare-covered health services to a hospital or other entity with which the physician or an immediate family member has a financial relationship. The law also prohibits hospitals from billing for any services provided as a result of a prohibited referral.

The alleged acts in the lawsuit occurred under prior Tulare Healthcare management, and the current management has cooperated fully with the government’s investigation.

Tulare Healthcare agreed to pay the settlement without admitting any wrongdoing.

While Tulare County is located in Central California, Reimche filed her lawsuit in United States District Court in Los Angeles because Tulare Healthcare’s Medicare claims were paid by Medicare’s fiscal intermediary in Camarillo.

This case was investigated by the Department of Health and Human Services, Office of Inspector General and the United States Attorney’s Office.

CONTACT: Assistant United States Attorney Wendy Weiss

Civil Fraud Section

(213) 894-0444

wendy.weiss@usdoj.gov

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