Judge unseals whistleblower lawsuit seeking ‘billions’ from Covenant in alleged healthcare scheme

Judge unseals whistleblower lawsuit seeking ‘billions’ from Covenant in alleged healthcare scheme
(Source: AP)

LUBBOCK, Texas (KCBD) - A whistleblower suit in federal court filed by Dr. Howard Beck against St. Joseph Health System, Covenant Health System and its subsidiaries, alleges Medicare fraud and seeks to recover damages for the government that could amount to billions of dollars.

The suit alleges that since at least 2010, Covenant entities engaged in a scheme involving false records, fraudulent claims and unlawful kickbacks to Covenant physicians for making referrals for services exclusively to Covenant groups.

The suit was filed September 30, 2016, but remained under seal in federal court until it was unsealed Tuesday so that it “could proceed.” Plaintiffs are seeking triple damages for the fraud they say incurred. The defendants in the suit are St. Joseph Health System, Covenant Health System, Covenant Medical Center and Covenant Medical Group.

According to the details of the suit, Dr. Howard Beck, listed as “relator,” is bringing the suit on behalf of the United States Government. Beck was the Chief of staff of St. Mary’s Hospital at the time of the 1998 merger of the system with St. Joseph and was, at the time the suit was filed, employed by Covenant Medical Center and is paid by St. Joseph’s.

Federal whistleblower laws protect whistleblowers in government jobs and some public companies and private contractors for the government.

Officials with Covenant Health issued a statement via email late Tuesday afternoon.

Covenant Health System was contacted by the U.S. Department of Justice in 2017 seeking information concerning whether it paid employed physicians compensation above fair market value. Covenant cooperated fully with the Department of Justice and provided information concerning the basis for the compensation paid to its physicians. Importantly, after reviewing all the information provided by Covenant, the Department of Justice declined to intervene in this lawsuit.

The allegations in Dr. Beck’s civil False Claims Act lawsuit apparently prompted the government’s inquiry.

Covenant Health System has not yet been served or had adequate time to review each of the allegations. Therefore, we cannot comment other than to say that Covenant follows rigorous standards for Medicare and Medicaid reimbursement claims, based on all relevant regulation and supported by our core values. Because the lawsuit is pending, we are not in a position to comment any further.

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