Indiana University Health and HealthNet, Kickback Scheme, Indiana 2013

Indiana University Health Inc. (IU Health) and HealthNet Inc. have agreed to pay a total of $18 million to resolve allegations that they violated federal and state false claims laws by engaging in an illegal kickback scheme related to the referral of HealthNet’s OB/GYN patients to IU Health’s Methodist Hospital.

The alleged kickback scheme, which occurred from May 1, 2013 through Aug. 30, 2016, involved IU Health providing HealthNet with an interest-free line of credit, the balance of which consistently exceeded $10 million. The United States alleged that HealthNet was not expected to repay a substantial portion of this loan and that this financial arrangement was intended to induce HealthNet to refer its OB/GYN patients to IU Health’s Methodist Hospital.

Under the settlement agreement, IU Health and HealthNet each will pay approximately $5.1 million to the United States and $3.9 million to the State of Indiana. Dr. Judith Robinson, a former employee of both Methodist Hospital and HealthNet, will receive approximately $2.8 million out of the federal share of the recovery.

“The payment of illegal remuneration to induce patient referrals interferes with health care providers’ independent judgment when they make referral decisions for their patients,” said Deputy Assistant Attorney General Joyce R. Branda for the Civil Division. “We will continue to pursue health care providers that engage in such conduct, which undermines public confidence in our health care system.”

“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 Joshua Minkler for the Southern District of Indiana. “Waste, fraud, and abuse can never be tolerated and tear at the fabric of first-class healthcare in this country.”

The settlement resolves a lawsuit filed in federal court in Indianapolis, Indiana, under the qui tam provisions of the False Claims Act, which permit private individuals to bring a lawsuit on behalf of the United States for false claims and to share in any recovery. The claims resolved by the settlement are allegations only, and there has been no determination of liability.

The lawsuit is captioned United States et al. ex rel. Robinson v. Indiana University Health, Inc. et al., Case No. 1:13-cv-2009-TWP-MJD (S.D. Ind.).

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