Kane v. Healthfirst, Inc. (Summary)

QUI TAM

Kane v. Healthfirst, Inc., Civil Action No. 11-2325 (ER) (S.D. N.Y. June 27, 2014)

The U.S. Attorney for the Southern District of New York filed a qui tam complaint-in-intervention alleging that a not-for-profit healthcare corporation erroneously submitted 900 claims to Medicaid and failed to timely reimburse the U.S. government.

The healthcare corporation discovered that a software compatibility error had caused its billing programs to automatically generate incorrect bills to secondary payers, including Medicaid. An individual, who became the relator, was asked by the corporation to examine the bills to determine which had been improperly submitted to the Department of Health. The relator discovered that more than 900 incorrect claims had been submitted, totaling over $1 million, as a result of this software error. Four days after the relator e-mailed his analysis to the corporation’s management, he was fired. The corporation did not move forward in addressing these erroneous claims. After two years and a Civil Investigative Demand seeking information, the corporation only reimbursed the federal government for 300 incorrect claims.

The qui tam complaint alleges that the corporation intentionally or recklessly failed to rectify the mistaken claims caused by the software error, and failed to timely reimburse the Department of Health for the money paid by Medicaid to cover these false claims.