Scripps Health System Whistleblower Lawsuit

Case Type: Whistleblower/Qui Tam

Organization: Scripps Health System

Sanford Heisler Sharp today announced that San Diego’s Scripps Health System has agreed to pay the United States Government more than $1.5 million to settle claims brought by a whistleblower under the False Claims Act. The suit was filed in early 2016.

The whistleblower, represented by Sanford Heisler Sharp alleged that the San Diego-based Scripps Health System unlawfully billed the United States Government for physical therapy services on behalf of a physician who was not present while the services were rendered. The case, filed in the U.S. District Court for the Southern District of California, claimed that Scripps persisted in this conduct despite warnings from the whistleblower.

David Sanford, Chairman of Sanford Heisler Sharp emphasized the importance of whistleblowers who speak up against unlawful claims for government reimbursement. “The Federal Government depends on whistleblowers to uncover healthcare fraud and report it,” Sanford said. “The government cannot review every claim for payment, so it depends on whistleblowers, like the one here, to bring unlawful conduct to the government’s attention. We all thank the whistleblower for having the courage to speak up and protect the tax dollars of every American.”

The False Claims Act is one of the federal government’s most important anti-fraud tools. Under the Act, whistleblowers (called relators), may bring a lawsuit on behalf of the government to recover money that the government has wrongfully paid to private parties. Such allegations may include claims that healthcare providers sought reimbursement from government health insurance programs, like Medicare, for procedures, services, or goods that are not eligible for reimbursement. The Act imposes treble damages (three times the amount of the fraud), civil penalties, and attorneys fees on defendants. In addition, the Act grants relators a share of the government’s recovery—a reward for information leading to the government’s repayment. Many states have similar statutes covering state monies, such as money expended under Medicaid programs.

“Fraud is often subtle,” added Russell L. Kornblith, Sanford Heisler Sharp's New York Managing Partner and one of the lead attorneys on the case. “Particularly in the healthcare sector, the government depends on whistleblowers in the know to speak up when they see something wrong. Here, the Relator saw claims that were not reimbursable and repeatedly warned Scripps. She rightfully deserves a reward for doing so.”