The former chief compliance officer of ChristianaCare Health System will receive more than $12 million as part of a settlement addressing his allegations of kickbacks and other False Claims Act (FCA) violations at the Delaware-based hospital network.
Ronald Sherman served as CCO at ChristianaCare from 2007-14. He filed a qui tam lawsuit against the hospital network in April 2017 in U.S. District Court for the District of Delaware.
On Dec. 21, a $47.1 million settlement agreement entered into by ChristianaCare was executed, according to court filings.
The lawsuit alleged ChristianaCare provided free services, including professional care by its nurse practitioners and physician assistants, to nonemployee doctors in exchange for patient referrals. By doing so, it “raked in millions of dollars in hospital bills paid by government healthcare programs, including Medicaid and Medicare,” said a press release from law firm Walden Macht & Haran, which represented Sherman.
“To my knowledge, this is the first FCA settlement—ever—based on a hospital allegedly providing private physicians with free services in the form of hospital-employed nurse practitioners and physician assistants,” said lead counsel Dan Miller in the release. “Any other hospital in the country that operates under the model that led to this settlement should consider changing its practices immediately or risk a whistleblower lawsuit.”
The settlement total is believed to be the largest under the FCA in Delaware history. Of the total, $42.5 million will be paid to the United States and the state of Delaware and $4.6 million will cover legal fees. Sherman’s award will be drawn from the $42.5 million, as will nearly $7.7 million Delaware’s Medicaid program will receive, the state’s attorney general announced.
Company response: “Following a favorable judgment 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 a ChristianaCare spokesperson in an emailed statement. “Our No. 1 priority is to provide the best possible care to every patient we serve.”
The settlement did not include an admission of liability.