Boston, Indiana hospitals pay millions to settle fraud cases

The United States Department of Justice announced major settlements in two lawsuits with healthcare systems.

In one case, Partners Healthcare and Brigham and Women’s Hospital (BWH) will pay $10 million to resolve a suit that involves allegedly fraudulent grant funding. The other case involves an $18 million civil settlement by Indiana University Health Inc. and HealthNet Inc. to resolve alleged violations of the False Claims Act.

The BWH case involved a stem cell research lab run by Piero Anversa, M.D., that allegedly obtained grants from the National Institutes of Health via the submission of falsified data. “Individuals and institutions that receive research funding from NIH have an obligation to conduct their research honestly and not to alter results to conform with unproven hypotheses,” said Acting U.S. Attorney William D. Weinreb in the announcement. He commended BWH for self-reporting the fraud, which he termed a waste of scarce government resources.

A BWH spokesperson told the Boston Business Journal the institution “has made significant enhancements to research integrity compliance protocols as a result of this event.” The settlement announcement came out on the same day BWH released news of buyout packages offered to 1,600 employees.

In the Indiana University case, a whistleblower filed a federal lawsuit claiming IU Health and HealthNet had violated federal anti-kickback laws by fraudulently billing Medicaid for services they said were provided by doctors when those services were allegedly provided by nurse midwives instead. Neither HealthNet nor IU Health admitted wrongdoing in the settlement, according to an article in the Indianapolis Business Journal.

Both HealthNet and IU Health claimed they agreed to the settlement in order to avoid protracted litigation. “There is no merit in [the] allegations of inappropriate patient care, referrals or billing practices,” added IU Health in a statement.

Both organizations will pay approximately $5.1 million to the United States and $3.9 million to the State of Indiana, according to the Department of Justice.