IU Health, HealthNet to pay $18 million to settle whistleblower lawsuit

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INDIANAPOLIS — State and federal prosecutors say Indiana University Health Inc. and nonprofit health care provider HealthNet Inc. will pay a combined $18 million to resolve a whistleblower lawsuit alleging their financial arrangements violated multiple laws.

They say IU Health provided an interest-free line of credit to HealthNet in part to induce HealthNet to refer its obstetrics and gynecology patients to IU Health’s Methodist Hospital in Indianapolis. They say violations of the federal Anti-Kickback Statute and state the federal False Claims Acts occurred between May 1, 2013, and August 30, 2016.

Under the settlement agreement, IU Health and HealthNet each will pay approximately $5.1 million to the U.S. and $3.9 million to the state.

“Helping to return millions of dollars in taxpayer funds to federal healthcare programs and the Indiana Medicaid Program is critically important to me and my office,” said U.S. Attorney Josh Minkler.  “Waste, fraud, and abuse can never be tolerated and tear at the fabric of first-class healthcare in this country.”

IU Health issued a statement saying it cooperated with prosecutors and that there was no determination of liability:

Indiana University Health, one of Indiana’s largest non-profit health systems, has resolved the civil case filed by Dr. Judy Robinson through a voluntary settlement agreement reached with Dr. Robinson, the U.S. Department of Justice and the Indiana Attorney General.

IU Health fully cooperated with the government throughout the case and agreed to resolve the allegations without any admission or determination of liability. In fact, the Department of Justice stated in its press release that “there is no evidence of physical injury or harm to patients as a result of the allegations.” There is no merit in Dr. Robinson’s allegations of inappropriate patient care, referrals or billing practices. Instead, the settlement agreement reflects IU Health’s desire to avoid the continued expense and distraction of prolonged litigation.

IU Health is pleased to settle this matter and continues to stand by the integrity and dedication of our outstanding caregivers and the quality of care delivered to all of our patients every day.

IU Health’s long-standing relationship with HealthNet was founded on a shared commitment to ensure access to high quality obstetric and gynecological services for the underserved population in central Indiana.

The ultimate goal was to ensure delivery of service in the most appropriate care setting. The arrangement with HealthNet actually resulted in substantial financial losses, which IU Health considers to be part of its nonprofit mission. IU Health remains committed to supporting HealthNet and its critical role in the effective delivery of services to pregnant women and their families.