Indiana University Health Settles Kickback Scheme Case for $18 Million

May 16th, 2017

Indiana University Health, Inc., and HealthNet, Inc., have agreed to an $18 million dollar settlement regarding claims that they violated the Anti-Kickback Statute and False Claims Act (FCA).

According to the Department of Justice (DOJ), a former HealthNet physician filed a whistleblower lawsuit, claiming that IU Health provided HealthNet with a line of credit that was never meant to be repaid. In return, HealthNet allegedly referred low-income patients in need of OB/GYN services to IU Health’s Methodist Hospital. The balance of the interest-free loan consistently exceeded $10 million, according to the DOJ.

HealthNet is Indiana’s largest federally qualified health center and operates eight primary care facilities and an OB/GYN clinic, mostly serving patients who are below the federal poverty level. According to the DOJ, the HealthNet patients were sent to IU Health without an alternate choice, allowing IU Health to bill Medicaid for their services.

IU Health and HealthNet oppose the allegations and did not admit any wrongdoing in the settlement agreement. Says IU Health, “the arrangement with HealthNet actually resulted in substantial financial losses” and it remained committed to a relationship with HealthNet to serve the underserved populations of Indiana.