July 26, 2017

VUMC settles longstanding lawsuit

Vanderbilt University Medical Center (VUMC) has agreed to settle a longstanding lawsuit, filed under the False Claims Act, accusing VUMC of submitting false or fraudulent claims to Medicare and Medicaid from 2003-2011.

The Department of Justice and relevant States Attorney Generals’ Offices thoroughly investigated the allegations, brought by three former VUMC clinicians, in order to decide whether to intervene in – effectively, take over – the conduct of the case. VUMC cooperated fully in the government’s investigation, and the Government chose not to intervene.   Nonetheless, individuals who file lawsuits of this nature have the right to continue on their own if the Government does not intervene, which in this case extended the lawsuit several more years.

 “Although we continue to strongly dispute the allegations in the lawsuit, to avoid the cost and distraction associated with further litigation we have agreed to settle. As part of the settlement, all parties agree that the allegations in the lawsuit have neither been proven nor disproven,” said Michael Regier, J.D., General Counsel & Secretary for VUMC. “While the plaintiffs and federal government found no evidence of wrongdoing, litigating these types of cases is very expensive and time consuming.  After six years, we determined it to be in the best interests of VUMC to end the litigation through a settlement.”

The settlement terms include a $6.5 million payment to the United States, most of which will be retained by the Medicare program, and a portion of which will be shared with relevant States. Also, as part of the settlement a payment will be made to the plaintiffs and their attorneys.  The amount of the settlement is not material from an overall financial perspective and enables the Medical Center to avoid costs associated with continuing litigation, which were expected to equal or exceed the settlement amount.

At no time throughout the lawsuit’s investigation was there any proof that patients’ health was being placed at risk through any of the actions alleged by the plaintiffs. The safety and well-being of VUMC’s patients is always the top institutional priority.

Federal lawsuits filed under the False Claims Act are common. The number of cases filed nearly doubled between 2008 and 2014, and in Federal fiscal year 2015 a total of 638 new qui tam lawsuits were filed.   The Government intervenes in fewer than 25 percent of cases filed under the False Claims Act.