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SC Whistleblower Healthcare Fraud Lawsuit Settles

SC Whistleblower Healthcare Fraud Lawsuit Reaches Settlement

whistleblower healthcare fraud lawsuitA whistleblower healthcare fraud lawsuit, based in South Carolina, was filed against a Richmond, VA-based company called Healthcare Diagnostic Laboratory. The company recently proposed a settlement in the whistleblower case.

Healthcare Diagnostic Laboratory will pay $47 million to the US Department of Justice, along with potential contingency payments later, which could top $100 million. This settlement resolves a year-long investigation and lawsuit into HDL and other laboratory companies which violated the False Claims Act with kick-back schemes.

The investigation questioned the legality of the fees paid to doctors in exchange for using HDL services, arguing whether or not those payments constituted kickbacks in violation of the False Claims Act, as the whistleblowers alleged. The investigators ultimately found that the payments interfered with the doctors’ ability to give sound, unbiased medical advice.

The original whistleblowers were Dr. Michael Mayes, a South Carolina doctor; Scarlett Lutz, of the South Carolina-based Palmetto Billing Service; Kayla Webster, a registered nurse; and Chris Riedel, former CEO of California-based Hunter Laboratories. Mayes, the lead plaintiff in the whistleblower case, was “a South Carolina doctor who had ethical concerns about blood testing labs paying physicians extra fees allegedly to get their business.”

HDL released this statement regarding the whistleblower healthcare fraud lawsuit settlement: “These allegations were made against a number of companies operating in the clinical laboratory industry by individuals who stand to personally profit by making these allegations.”

Whistleblower Healthcare Fraud Lawsuits in South Carolina

The populous state of South Carolina has many hospitals, skilled nursing facilities, and other medical facilities to treat the many residents of the Southern state. Although most of these healthcare centers operate above-board, including when they bill Medicare and Medicaid for payments, not all facilities do so.

Healthcare fraud can include kickback schemes to doctors to drum up business, including referrals to specific specialists, pharmacies, or nursing homes. It can also include intentionally overbilling Medicare or Medicaid for services rendered, then splitting the profits, or falsely filing for federal money for services that were never rendered, or facilities that do not exist.

Whistleblower lawsuits involve one or more “whistleblowers” who witness fraud against the federal government, or misuse of federal funds. According to qui tam laws, outlined in the federal False Claims Act, a whistleblower must have first-hand knowledge of the fraud, such as enduring pressure from employers to falsify documents. The whistleblower cannot hear about the charges against their employer through a media outlet – the charges must be original.

Once the qui tam lawsuit is filed, the whistleblower could face criticism from employers, or could be fired. These acts are may give rise to a claim for wrongful termination.  Having the protection and information a qui tam attorney can offer will bolster your case’s validity.

The Strom Law Firm Protects South Carolina Whistleblowers

If you believe you have witnessed health care fraud, or any other types of fraud, against the federal government at your job you may be able to file a qui tam or whistleblower lawsuit. The South Carolina whistleblower protection attorneys at the Strom Law Firm offer a free case evaluation to review the facts of your case free of charge. Contact us today. 803.252.4800

About Pete Strom

Defending criminal charges including drug crimes, DUI, CDV, mail fraud, wire fraud, bank fraud, computer crimes, money laundering, and juvenile crimes, Pete also handles Federal and State investigations. Representing individuals in Civil Matters including Class Actions, Personal Injury, Qui Tam Actions, Defective Products, Nursing Home Neglect, and Professional Licensing Defense cases. Joseph Preston “Pete” Strom, Jr., the managing partner at Strom Law Firm, L.L.C., has been fighting for justice since 1984.

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