Whistleblower Lawsuit Accuses Vanderbilt Medical Center of Medicare Fraud

Vanderbilt Medical Center Faces Whistleblower Lawsuit, Accused of Over a Decade of Medicare Fraud

Vanderbilt Medical Center
A federal court unsealed a whistleblower lawsuit against Vanderbilt University Medical Center this week, claiming that the university perpetrated Medicare fraud for more than a decade.

The whistleblower lawsuit was filed in 2011 by three doctors under the False Claims Act in a US District Court. Federal investigators have been looking into the accusations for two years, but have not taken action or asked to become party to the lawsuit. Federal investigators asked for more time to look into the accusations, but a federal judge denied the request and has now unsealed the Medicare fraud lawsuit.

The suit accuses Vanderbilt UMC of engaging in a “scheme to maximize income from its medical practices by submitting false claims to federal and state health insurance programs for physician services that Vanderbilt knows do not meet Medicare’s billing conditions for such services.” Allegedly, Vanderbilt UMC intentionally created a computer program that would perpetuate Medicare fraud through fraudulent billing practices.

“We do not believe these allegations have merit,” VUMC spokesman John Howser said in a prepared statement. “Vanderbilt University Medical Center has been cooperating with the government over the past two years regarding a civil inquiry related to treatment documentation and billing records. (To) date, we have not found evidence supporting the allegations.” Howser also said that Vanderbilt is prepared to “defend itself vigorously.”

Medicare Fraud Allegations in the Whistleblower Lawsuit

As a teaching hospital, Vanderbilt UMC is eligible for Medicare payments for certain things; however, those payments can only happen according to specific Medicare guidelines. The whistleblower lawsuit alleges that Vanderbilt defrauded the federal government’s Medicare program by falsely reporting that anesthesia services complied with Medicare guidelines, when that was rarely the case. “As Vanderbilt is aware, many surgeons’ routine practice is to simultaneously schedule multiple surgeries in multiple locations throughout the day,” the lawsuit says.

The Medicare fraud lawsuit also alleges that physicians were encouraged to avoid handwritten notes if they were unable to cover certain surgeries. An email from 2004 allegedly reads: “Please do not make annotations in the record about how many rooms you are currently covering; it only confuses and complicates the billing and documentation process.”

Further, Vanderbilt is accused of creating a software tool to perpetuate fraudulent billing practices. “Vanderbilt’s Anesthesia Department, including specifically Drs. Michael Higgins and Jeffrey Balser, ‘collaborated in the engineering, design and development of a … comprehensive electronic payment information system specialized for high-acuity care.’ Among the stated objectives of the system was for Vanderbilt to ‘(i)mprove financial margins with greater staff and resource efficiency.’”

Though the University considered VPIMS a success, the lawsuit claims:
“In reality, Vanderbilt has used the VPIMS to maximize its false billing practices by taking advantage of its remote access features to schedule attending physicians to be in multiple places at once, while continuing to bill their services as if they were actually present and personally performing the services at each place. VIPIMS’ purported improvements in billing efficiency are, in fact, largely a function of Vanderbilt’s development of mandatory default software settings that require its physicians, in all instances, to document that they meet Medicare’s conditions for payment.”

“The allegations about VPIMS are patently false,” Howser said. “VPIMS is a highly advanced software tool to enable improvements in patient care, increase patient safety and improve anesthesia care through research. This is an important tool that remains integral to our clinical operations.”

The Strom Law Firm Protects Whistleblowers in Medicare Fraud Cases in South Carolina

The False Claims Act, also known as the Whistle Blower Act or a qui tam action, is intended to encourage people to come forward with information and assist the government in stopping the waste of Government funds.

Common whistleblower actions include:

  • Medicare fraud,
  • defense contractor fraud, and
  • other kinds of fraud.

To bring a qui tam action under the statute, an individual must have personal knowledge and actual evidence of fraud. Successful qui tam claimants will be rewarded a portion of the money the government recovers.

If you have direct knowledge of fraud against the government and believe you have a qui tam or whistleblower case, whether it is against a for-profit long term care facility, a technology corporation, or financial institution, the attorneys at the Strom Law Firm can help. We offer free, confidential consultations so you can discuss the facts of your case with impunity. 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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