University of Miami Must Pay $22M to Settle Medicare FCA Allegations

The University of Miami has agreed to pay $22 million to settle False Claims Act allegations stemming from three separate lawsuits related to billing practices and fraudulent claims for laboratory services.

University of MiamiPhoto Credit: Shutterstock

These allegations were first raised in 2013 through the filing of a whistleblower lawsuit by Jonathan “Jack” Lord, former COO of the UM Miller School of Medicine. Two additional suits were filed later that year and in mid-2014. The U.S. Department of Justice intervened in all three and alleged:

1. UM knowingly, and intentionally, engaged in improper billing practices related to its Off-Campus Hospital Facilities. The Coral Gables-based University allegedly sought payment at higher rates without providing beneficiaries the required notice that they would face higher costs when receiving services.These actions were taken after UM converted multiple physician offices to Off-Campus Hospital Facilities and also following being advised by a Medicare Administrative Contractor that its notice practices were deficient.

2. UM billed federal health care programs for medically unnecessary lab tests for patients who received kidney transplants at the Miami Transplant Institute, a transplant program jointly operated by UMiami and Jackson Memorial Hospital. Each time a patient sought treatment at MTI, UMiami’s electronic ordering system automatically prompted the ordering several tests for the patient at UMiami’s laboratory. The DOJ alleged that several of these laboratory tests were medically unnecessary and “dictated by financial considerations rather than patient care.”

3. UM caused Jackson Memorial to submit inflated claims for reimbursement for pre-transplant lab testing conducted at MTI and JMH then paid UMiami in excess of fair market value and Medicare allowable costs for those tests billed by JMH. While UMiami could have billed Medicare directly for the tests, the DOJ alleged that UMiami chose not to in an attempt to increase its income from JMH in exchange for UMiami’s surgeons continuing to perform surgeries at JMH. JMH separately settled with the DOJ for $1.1 million.

In addition to the monetary settlement, UM also agreed to enter into a five-year corporate integrity agreement with the U.S. Department of Health and Human Services.

“Medical providers who submit fraudulent claims to our taxpayer-funded health care programs not only violate the public’s trust, they compromise the very integrity of these programs,” said Juan Antonio Gonzalez, acting U.S. attorney for the Southern District of Florida, in a statement. “Our office will aggressively pursue investigations against all providers who knowingly violate these billing rules, no matter their size.”

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