Meridian Agrees to Pay More Than $5 Million to Settle False Claims Act Suit Alleging Kickbacks

Posted September 10th, 2014.

For more information, contact Jamie Moss, newsPRos,646-791-4848[email protected]

(September 10, 2014, New York, NY) — Sanford Heisler, LLP today announced that Meridian Surgical Partners, LLC (“Meridian”), a health care company specializing in the management of ambulatory surgical centers (ASCs), has agreed to pay a total of $5.12 million to settle a False Claims Act (“FCA”) lawsuit brought by a whistleblower. The FCA whistleblower provisions permit private citizens known as “Relators” to bring qui tam lawsuits on behalf of the U.S. and receive a portion of the proceeds of any settlement or judgment.

Thomas Reed Simmons sued Meridian in the U.S. District Court for the Middle District of Tennessee under the whistleblower provisions of the False Claims Act for allegedly engaging in an illegal kickback scheme that defrauded taxpayers out of millions of dollars in Medicare payments.

Michael D. Palmer, Senior Litigation Counsel at Sanford Heisler, said “This settlement reaffirms that Relators who choose to pursue their claims after the Government has declined to intervene can achieve successful results. While we were fully prepared to take this case through trial, we are pleased with the recovery obtained on behalf of Mr. Simmons and the Government.“

Mr. Simmons worked as a business office manager for an ASC which was managed and principally owned by Meridian. In his complaint, Mr. Simmons alleged that Meridian offered and paid remuneration to physicians of the ASC in order to secure patient referrals for services paid for by Medicare, in violation of the federal Anti-Kickback Statute and the False Claims Act. Simmons accused Meridian of both paying more than fair market value for majority ownership of the ASC and rewarding physicians for referring patients by offering them minority ownership stakes.

Reed Simmons initiated the case on behalf of the United States Government in May 2011 while he was still employed by Meridian. After the Government declined to intervene, Mr. Simmons and his counsel Jonathan Kroner, of the Jonathan Kroner Law Office, decided to litigate the case on the Government’s behalf. Mr. Reed and Mr. Kroner brought Sanford Heisler into the case to act as lead litigation counsel.  The case was scheduled to go to trial starting on September 23, 2014.

Ross Brooks, Co-Chair of Sanford Heisler’s whistleblower practice, said “This is one of very few cases to allege successfully that payments of ownership interests in an ASC to physicians in exchange for patient referrals are kickbacks that violate the False Claims Act. Those seeking to disguise illegal kickbacks as legitimate business transactions or standard industry practice should take heed that the Government will be scrutinizing more of these arrangements in future qui tam investigations.”

David Sanford, Chairman of Sanford Heisler, said that “Mr. Simmons had the courage to take Meridian to task for violating the law, at great personal risk. We applaud his efforts and applaud the contribution of the United States Department of Justice in this matter.”

About Sanford Heisler

Sanford Heisler LLP is a public interest class-action litigation law firm with offices in New York, Washington, DC, and San Francisco, specializing in civil rights and general public interest cases and representing plaintiffs with the whistleblower, employment discrimination, labor and wage violations, predatory lending, consumer fraud, and other claims.

Sanford Heisler has an impressive history of success in qui tam, or whistleblower cases brought under the False Claims Act, having represented whistleblowers in a 124 million dollar qui tam settlement with Omnicare, Inc., a 762 million dollar global qui tam settlement with Amgen, Inc., and a 23.5 million dollar qui tam settlement with Medtronic, all with the assistance of the U.S. Department of Justice. In addition, Sanford Heisler has filed over 20 other whistleblower actions now pending throughout the United States and is currently investigating and drafting additional matters across the United States.

Along with a focus on the False Claims Act and other whistleblower cases, Sanford Heisler also represents individuals in employment disputes and has achieved particular success in the representation of executives in such disputes. For example, the Firm secured the largest jury award in U.S. history in an employment discrimination case, winning more than $250 million dollars for 7,000 female employees at Novartis Pharmaceuticals Corporation.