Mayo Clinic Agrees to $1.26 Million Settlement in False Claims Case

On August 6, 2012, Mayo Clinic and three related groups were ordered to settle a False Claims federal government lawsuit. The defendants agreed to the settlement amount of $1.26 million.

The lawsuit alleged that Mayo had submitted false claims to the federal government by billing federal health care programs including Medicare and Medicaid for work that was never done. In this case, the work involved billing the government for preparing and examining human tissue slides.

The primary whistleblower in this case was physician and attorney, Dr. David Ketroser. His suit involved specific illegal activities at the Mayo labs in Rochester, Minnesota.

The suit against Mayo Clinic began back in 2007. It was filed under the False Claims Act, which encourages private citizens to bring suit against anyone who is defrauding the government. Also called a whistleblower, or qui tam action, this type of suit includes provisions to protect the whistleblower from retaliation and to allow him or her a portion of any money recovered.

In September 2010, the U.S. Department of Justice got involved in the qui tam action. At this time Mayo, having received the subpoena, paid about $263,000. However, the recent settlement requires they pay an additional one million dollars.

Lamont Pugh, III, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General for the Chicago region had this to say: “Billing government health programs for services never rendered – as Mayo allegedly did – is totally unacceptable . . . OIG will continue working with our law enforcement partners as well as private parties to investigate these cases and ensure the recovery of precious taxpayer dollars.”

In the end, the whistleblowers in the qui tam case will receive $229,822, and Mayo will pick up the legal costs of the litigation.