Former CCO Set to Receive $12 Million in Settlement Over Kickback Allegations at ChristianaCare Health System

The former Chief Compliance Officer (CCO) of ChristianaCare Health System, Ronald Sherman, is set to receive over $12 million as part of a settlement addressing his allegations of kickbacks and False Claims Act (FCA) violations at the Delaware-based hospital network.

Sherman, who served as CCO at ChristianaCare from 2007 to 2014, filed a qui tam lawsuit against the hospital network in April 2017. Court filings reveal that on December 21, a $47.1 million settlement agreement was executed by ChristianaCare.

The lawsuit alleged that ChristianaCare provided complimentary services, including professional care by nurse practitioners and physician assistants, to nonemployee doctors in exchange for patient referrals. This practice resulted in the hospital network generating millions of dollars in hospital bills paid by government healthcare programs, including Medicaid and Medicare. Law firm Walden Macht & Haran, representing Sherman, stated, "To my knowledge, this is the first FCA settlement—ever—based on a hospital allegedly providing private physicians with free services in the form of hospital-employed nurse practitioners and physician assistants."

The settlement, believed to be the largest under the FCA in Delaware history, includes a payment of $42.5 million to the United States and the state of Delaware, with $4.6 million allocated for legal fees. Sherman's award will be drawn from the $42.5 million, along with nearly $7.7 million for Delaware's Medicaid program. ChristianaCare responded to the settlement, stating, "Following a favorable judgment by the court, which dismissed a portion of the claims, we are pleased to settle this matter as we focus forward on meeting the evolving health needs of the diverse communities we serve." The settlement, however, did not include an admission of liability.

This resolution highlights the significant financial implications for healthcare institutions found in violation of the False Claims Act and underscores the potential risks associated with practices that could be interpreted as kickbacks or violations of anti-fraud regulations.

By fLEXI tEAM