Whistleblower Suit Against Mayo Clinic Leads to $1.2 Million Settlement

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The Mayo Clinic has agreed to pay more than $1.2 million to settle a federal lawsuit claiming it billed the government for lab tests that it never performed.

The U.S. Department of Justice said the lawsuit was filed under the False Claims Act, which allows “qui tam” suits by citizens acting as whistleblowers. The Justice Department became involved after the lead whistleblower, physician and attorney David Ketroser, filed his suit in 2007.

Ketroser and other whistleblowers will split about $229,800 as their share of the settlement.

The whistleblowers and the Justice Department accused the Mayo Clinic of accepting payments from Medicare and Medicaid for lab tests that it never conducted. In a statement, the Mayo Clinic said the payments were the result of a billing error and denied that it had intentionally overbilled Medicare and Medicaid.

The allegations related to lab tests performed from 1999 to 2007. After Ketroser filed suit, the Mayo Clinic changed its billing practices and voluntarily repaid more than $260,000 to the federal government. Mayo had seven days as of Aug. 2 to pay the additional $1 million.

Government Encourages Citizens to Act
The Mayo Clinic settlement is among a growing number of settlements and awards that have helped the federal government stop big business fraud, thanks to whistleblower lawsuits. The federal government has been more and more interested in pursuing investigations begun by whistleblowers, particularly involving health care providers.

As we have mentioned, Health and Human Services Secretary Kathleen Sebelius recently announced an additional $300 million in her budget to pursue health care fraud. Health care fraud includes wrongdoing such as false claims or fraudulent billing for services under Medicare, Medicaid and Social Security.

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