IU Health, HealthNet to pay $18M to settle false-claims case

Back to TopCommentsE-mailPrintBookmark and Share

Indiana University Health and HealthNet Inc. have agreed to pay a total of $18 million to resolve a whistleblower lawsuit alleging they submitted claims to the government in violation of anti-kickback laws. Federal and state authorities announced the settlement agreement Thursday afternoon.

The lawsuit claimed the two health care providers left their pregnant patients’ care to lower-cost nurse midwives instead of having them treated by doctors. When billing Medicaid, the two claimed the services were provided by doctors, the complaint said.

The lawsuit was brought by Dr. Judith Robinson, former director of women’s services at HealthNet and medical director of obstetrics and gynecology services at IU Health.

The suit said some newborn babies suffered permanent neurological injuries, and some mothers had to undergo emergency caesarian sections. There were even some cases of maternal and fetal death, the suit claimed, but a statement from the U.S. Justice Department said there was no evidence of physical injury or harm to patients as a result of the allegations.

Under the settlement agreement, IU Health and HealthNet are expected to each pay approximately $5.1 million to the United States and $3.9 million to the state of Indiana.

Neither health organization could be reached for immediate comment Thursday. IU Health is the largest health system in Indiana, and HealthNet is the largest provider of midwifery services in the state.

According to the Justice Department, between May 1, 2013 and Aug. 30, 2016, IU Health provided HealthNet with “continuous and substantial financial support” in the form of an interest-free line of credit, the balance of which exceeded $10 million. HealthNet was allegedly not expected to substantially repay the outstanding balance.

The Justice Department alleged that the financial arrangement was intended to induce HealthNet to refer its OB/GYN patients to IU Health’s Methodist Hospital. IU Health then billed Medicaid for patient hospital stays, tests and procedures.

The anti-kickback statute prohibits the knowing and willful payment to induce the referral of services or items that are paid for by a federal health care program, such as Medicaid. Claims submitted to federal health care programs in violation of the law are also false claims under the False Claims Act.

“The arrangement between IU Health and HealthNet took advantage of Hoosiers on Medicaid by limiting their health care options exclusively to those within the IU Health Network, contriving a system that benefited only IU Health,” Indiana Attorney General Curtis Hill said in a statement.

U.S. Attorney Josh J. Minkler added: “Waste, fraud and abuse can never be tolerated and tear at the fabric of first-class health care in this country.”

The settlement was a result of an investigation by the Department of Health and Human Service’s Office of Inspector General and the Indiana Attorney General’s Office Medicaid Fraud Unit.


Post a comment to this story

We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
You are legally responsible for what you post and your anonymity is not guaranteed.
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
Subscribe to Indiana Lawyer
  1. Don't we have bigger issues to concern ourselves with?

  2. Anyone who takes the time to study disciplinary and bar admission cases in Indiana ... much of which is, as a matter of course and by intent, off the record, would have a very difficult time drawing lines that did not take into account things which are not supposed to matter, such as affiliations, associations, associates and the like. Justice Hoosier style is a far departure than what issues in most other parts of North America. (More like Central America, in fact.) See, e.g., When while the Indiana court system end the cruel practice of killing prophets of due process and those advocating for blind justice?

  3. Wouldn't this call for an investigation of Government corruption? Chief Justice Loretta Rush, wrote that the case warranted the high court’s review because the method the Indiana Court of Appeals used to reach its decision was “a significant departure from the law.” Specifically, David wrote that the appellate panel ruled after reweighing of the evidence, which is NOT permissible at the appellate level. **But yet, they look the other way while an innocent child was taken by a loving mother who did nothing wrong"

  4. Different rules for different folks....

  5. I would strongly suggest anyone seeking mediation check the experience of the mediator. There are retired judges who decide to become mediators. Their training and experience is in making rulings which is not the point of mediation.