ChristianaCare’s $47 million whistleblower settlement has been approved by feds and the state
Federal and state officials signed off on the whistleblower settlement that was reached earlier this year involving ChristianaCare, Delaware’s largest health system.
Federal and state officials have approved a $47 million whistleblower settlement between ChristianaCare, Delaware’s largest health system, and the nonprofit’s former chief compliance officer.
The settlement, signed Thursday by a U.S. Department of Justice official, involves alleged violations of the federal False Claims Act and anti-kickback laws at Christiana Hospital in Newark, Del. The nonprofit health system’s former chief compliance officer, Ronald Sherman, filed the lawsuit in 2017.
The lawsuit alleged that ChristianaCare provided free services of its employed doctors, residents, and nurse practitioners to a group of neonatology physicians in exchange for referrals to ChristianaCare’s neonatal intensive care unit.
Hospitals are not allowed to pay doctors for referrals under federal law.
The relationship in question between ChristianaCare and Neonatology Associates began around 2010 and continued into 2014, when the Neonatology Associates physicians became ChristianaCare employees, according to the lawsuit filed in U.S. District Court for the District of Delaware.
ChristianaCare agreed to pay $42.5 million to the United States and Delaware and $4.6 million to Sherman’s attorneys at Walden Macht & Haran LLP. Sherman’s share is $12.1 million.
“As far as we are aware, this groundbreaking settlement is by far the largest False Claims Act recovery of any kind in Delaware history,” Dan Miller, a partner in the Wilmington office of Walden Macht & Haran, said in September.
The health system did not admit liability in the settlement. “We are pleased to settle this matter as we focus forward on meeting the evolving health needs of the diverse communities we serve,” ChristianaCare said in an emailed statement.
In addition to its flagship hospital in Newark, ChristianaCare owns Wilmington Hospital in Wilmington and Union Hospital in Elkton, Md. The three hospitals combined have more than 1,200 beds.
The health system reported $2.9 billion in revenue in the year that ended June 30. Its operating income was $22.6 million, which was reduced by $45 million reserved for the whistleblower settlement. ChristianaCare had previously set aside $2 million in connection with the case.