Former company vice president blows whistle on kickbacks, receives $9 million
A former vice president of a healthcare technology company will pocket a $9 million award for blowing the whistle on its alleged kickback schemes.
The company, Boca Raton, Fla.-based Modernizing Medicine Inc., or ModMed, has agreed to pay $45 million to settle federal allegations that it unlawfully received kickbacks and paid for referrals, the U.S. Department of Justice said Nov. 1.
The feds began investigating ModMed after Amanda Long, a former vice president of product management at the company, filed a lawsuit in federal court in 2017 under qui tam, or whistleblower, provisions which let private individuals sue on behalf of the government and share in any recovery. The government later intervened in the case and launched its own investigation, resulting in the settlement. Long will receive approximately $9 million of the settlement, the feds said.
The U.S. government is placing an emphasis on combatting healthcare fraud, which it says causes tens of billions of dollars in losses each year.
Ethic Alliance can assist whistleblowers in bringing important cases such as the one that led to the ModMed settlement, noted Scott Williams, CEO of Ethic Alliance. Tips and complaints about potential fraud and corruption can be reported to Ethic Alliance here.
In the ModMed case, the U.S. government alleged the company violated kickback laws through three marketing programs. In one, the company allegedly solicited and received kickbacks from another company, Miraca Life Sciences Inc., in exchange for recommending and arranging for ModMed’s customers to use Miraca’s lab services. ModMed also allegedly conspired with Miraca to improperly donate ModMed’s technology to healthcare providers in an effort to increase lab orders to Miraca and get customers for ModMed. In addition, the company allegedly paid kickbacks to its healthcare provider customers and to other influential sources in the healthcare industry to recommend ModMed’s technology and refer potential customers to it.
Miraca previously settled federal charges against it. In January 2019, Miraca (now known as Inform Diagnostics) agreed to pay $63.5 million to resolve allegations that it violated kickback laws by providing to referring physicians subsidies for EHR systems and free or discounted technology consulting services, the feds said.
The Justice Department is trying to root out fraud in the electronic health record technology field, said U.S. Attorney Nikolas P. Kerest for the District of Vermont, in a statement.
“It is imperative that medical providers be able to trust the health record systems with which they document important and sensitive patient information, and for too long electronic health record vendors have prioritized only sales,” Kerest said. “The government alleges that for years, ModMed, through a variety of schemes, engaged in illegal kickbacks that distorted both the EMR and pathology lab markets, in addition to providing its users with a deficient product. This resolution reflects the seriousness of the government’s allegations and the determination of the Department of Justice to restore integrity to the electronic health record field.”
Contact Ethic Alliance at info@ethicalliance.com
Related link: https://www.justice.gov/opa/pr/modernizing-medicine-agrees-pay-45-million-resolve-allegations-accepting-and-paying-illegal
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