Whistleblower lawsuit accuses AIDS Healthcare Foundation of $20 million kickback scheme

Three former managers of the AIDS Healthcare Foundation (AHF) have filed a lawsuit against the nation's largest provider of medical care for HIV and AIDs, alleging violations of the False Claims Act and the Anti-Kickback Statute. The suit, filed in a district court in Southern Florida, alleges that AHF paid kickbacks to employees and patients, which led to $20 million in false claims paid by Medicare and Medicaid.

AHF, which is based in Los Angeles but operates in 12 states, including Florida, provides HIV and AIDS care to more than 200,000 patients in 28 countries. Former managers Jack Carrel of Louisiana, Mauricio Ferrer of Florida and Shawn Loftis of New York allege that the scam began in California in 2010 and spread east. Testing personnel were paid on a "commission based" formula that doled out bonuses based on numerical testing goals. Specifically, AHF testers were paid $100 if they connected a patient with a positive test result to an AHF "linkage coordinator" that would refer that patient for clinical services at an AHF clinic, according to the lawsuit.

Linkage coordinators were also paid $50 for every HIV-positive patient that was referred for clinical services, according to the lawsuit. Additionally, coordinators were authorized to pay for meals or transportation for patients, and patients were offered incentives to utilize AHF pharmacies with a "monthly allotment of multivitamins and nutrition shakes worth more than $50."

Although AHF is a nonprofit, the suit describes the company's "voracious appetite" for revenue tied to HIV patient referrals. According to the plaintiffs, at a 2013 leadership summit, AHF President Michael Weinstein advocated for increased testing, referrals and retention of HIV-positive patients, and authorized a nationwide incentive program that would pay patients $50 for self-referrals to AHF medical care, as well as ongoing $50 payments every few months to keep patients at AHF clinics.  

Weinstein denied wrongdoing, noting that the company's "proactive approach to finding and linking HIV-positive individuals to lifesaving care and treatment is critical to stopping HIV in this country," according to the Associated Press. Weinstein added that both the federal government and the state of Florida had declined to intervene in the lawsuit.

A statement by Cohen Milstein, one of the firms representing the whistleblowers, said the kickbacks led to "tens of millions of dollars in payments by federal healthcare programs," and that the "malicious retaliation" against the former managers violated provisions of the False Claims Act.

A report released by the Office of Inspector General (OIG) last year revealed that Medicare Part D spent $32 million on HIV drugs for patients that did not need medication in 2012, FierceHealthPayer: AntiFraud previously reported. 

A subsequent OIG report, released in November, indicated that Medicare Part D paid for HIV drugs for 158 deceased patients in 2012. That same month, Columbia University and its affiliate, the International Center for AIDS Care and Treatment Programs, agreed to pay $9 million to settle claims it misused federal grant money.

For more:
- here's the whistleblower lawsuit (.pdf) against AHF
- read the AP story
- here's the Cohen Milstein statement