How Christiana Care worked around DOJ objections to its whistleblower settlement
Last fall, the U.S. Department of Justice appeared to be at an impasse with Christiana Care, as federal authorities threatened to block the hospital system’s $47-million deal to settle claims it had carried out a kickback scheme with Medicaid dollars.
According to a letter sent then to Judge Richard Andrews by an attorney in the case, Christiana Care had wanted the settlement to free it from liability for allegedly submitting false medical bills to the U.S. government, and for allegedly inducing private doctors to do the same.
But federal officials balked, according to the letter, and insisted the settlement not wipe away claims around the private physicians’ billings.
They said that only a narrower deal would receive the necessary DOJ approvals — according to the letter sent in October by Dan Miller, attorney for the whistleblower in the case.
Christiana Care “and the government have been discussing this issue for 5-6 weeks and … no material progress has been made,” Miller said.
But, then, over the holidays, the DOJ signed off on the deal.
What prompted the change appears to have been a legal maneuver — a partial motion for summary judgement — filed in November that did away with the allegations at the heart of DOJ concerns.
Rather than settle the claim that Christiana Care — Delaware’s largest hospital system — induced doctors to commit fraud, the unopposed motion prompted Judge Andrews to simply toss out that part of the case.
While the move was a case of wise lawyering, it is unclear whether federal officials played a part in the workaround. A spokeswoman for the U.S. DOJ in Delaware did not respond to a request to comment.
Miller also declined to comment for this story.
For its part, Christiana Care emphasized that the summary judgement motion went unopposed and that their ultimate settlement “does not include admission of liability.”
‘Following a favorable judgement by the court, which dismissed a portion of the claims, we are pleased to settle this matter as we focus forward on meeting the evolving health needs of the diverse communities we serve,” said Christiana Care spokesman Shane Hoffman.
It all comes six years after Christiana Care’s former head of compliance, Ronald Sherman, filed the whistleblower lawsuit claiming the hospital system defrauded taxpayers between 2010 until 2017 by participating in a wide ranging "kickback scheme" that allowed independent doctors to bill Medicaid for services that hospital staff had actually performed.
In exchange for the unearned billings — many of which were allegedly for the care of newborns — the doctors would send lucrative patient referrals back to Christiana Care, according to Sherman.
The lawsuit landed at a time when Christiana Care was expanding its profitable maternity wing and vying to become a medical research hub in the Mid-Atlantic region.
The ultimate settlement requires Christiana Care to pay $47.1 million, of which about $17 million will go to Sherman and his attorneys.
The remainder goes to the U.S. and Delaware governments.