UPMC settles whistleblower case for $38 million

UPMC has agreed to pay $38 million to settle a long-running whistleblower lawsuit filed by former employees that alleged violations of the federal False Claims Act.

The parties agreed to settle the lawsuit in U.S. District Court in September but did not finalize the deal until this week, according to Andrew Stone, a lawyer representing the plaintiffs.

UPMC did not admit wrongdoing.

Neurosurgeon J. William Bookwalter, neurophysiologist Robert Sclabassi, and surgical technologist Anna Mitina sued UPMC and a number of staff neurosurgeons in 2012.

They claimed UPMC and its neurosurgeons engaged in fraud to boost doctors’ pay and revenues for the $28 billion hospital system.

The settlement resolves allegations that UPMC paid neurosurgeons excessively, and that those doctors referred procedures and surgeries to UPMC in violation of something called the Stark Law, according to a statement from the plaintiffs’ attorneys.

“Patients need and deserve to know that the hospital services they receive are the product of sound medical judgment, rather than motivated by the physician’s financial interests,” said Steve Del Sole, another plaintiffs’ lawyer.

The settlement will be divided between the whistleblowers and the federal government. The whistleblowers will get $11 million, or 29%. The federal government will get the rest.

Paul Wood, a UPMC spokesman, said the health care giant is pleased to have the lawsuit resolved.

“The settlement, which includes no admission of liability, allows UPMC to keep its focus where it belongs — on providing world-class care to our patients,” Wood said in a statement.

The case was filed in 2012 and had a partial settlement for $2.5 million in 2016.

Stone praised the whistleblowers for coming forward.

“This kind of recovery would simply be impossible without the bravery and commitment of whistleblowers willing to incur enormous risk to do the right thing on behalf of the taxpayers,” Stone said.

The False Claims Act allows private citizens to sue on behalf of the government in cases of fraud, including false claims submitted to federal healthcare programs such as Medicare and Medicaid.