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Court Grants Partial Summary Judgment on Stark Law Violations but Denies it on False Claims Act Claims in Qui Tam Whistleblower Case Against Halifax Hospital

A federal judge has granted partial summary judgment on claims alleging Stark Law violations in a qui tam case brought by a whistleblower against Halifax Hospital Medical Center and Halifax Staffing, Inc.  The court denied summary judgment as to the amount of the damages caused by the Stark Law violations and denied it as to claims brought under the False Claims Act.

The whistleblower litigation was filed under the qui tam provisions of the False Claims Act by Elin Baklid-Kunz, an employee of Halifax for more than 15 years.  In 2008, the whistleblower was promoted to Director of Physician Services, a position she still holds.  According to court documents, in her role as Director of Physician Services, the whistleblower reviewed the hospital’s contracts with physicians and discovered compensation arrangements that the whistleblower thought violated the anti-kickback provisions of the Stark Law.

In June 2009, the whistleblower filed a qui tam case alleging that Halifax violated the Stark Law and False Claims Act.  Specifically, the whistleblower alleged that Halifax submitted false claims to Medicaid and Medicare for hospital admissions that were not medically necessary, performed unnecessary medical procedures, and billed Medicare for services provided as a result of referrals from physicians with whom Halifax had improper financial relationships.

The federal judge in the whistleblower case in the United States District Court for the Middle District of Florida granted partial summary judgment on the government’s claims that Halifax violated the Stark Law.  Specifically, the judge found that Halifax violated the anti-kickback statute by submitting claims for designated health services provided to patients referred by six oncologists with whom the hospital had a compensation arrangement that was not within one of the Stark Law exceptions.

The court found that issues of material fact remain as to the amount of damages attributable to Halifax’s Stark Law violations and as to whether or not Halifax violated the False Claims Act.   The judge denied summary judgment as to those items.  Pursuant to the qui tam provisions of the False Claims Act, the whistleblower Elin Baklid-Kunz will be entitled to a percentage of any damages recovered by the government as her reward.

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Business Litigation | False Claims Act & Whistle-blower Cases