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Kalispell Pays $24 Million to Department of Justice to Settle Whistleblower Claim

Kalispell Regional Healthcare, a healthcare organization based in Montana, agreed to pay $24 million to the U.S. Department of Justice to settle a whistleblower lawsuit.

In the claim, Kalispell was alleged to have 63 physicians taking part in an illegal kickback scheme to earn more money and boost overall revenue, a violation of the Stark Law, the Anti-Kickback Statute and the False Claims Act. The settlement figure makes it the largest recovery in Montana history for False Claims Act cases.

CFO’s complaints prompt investigation

The whistleblower in the case was Jon Mohatt, who was the chief financial officer for the hospital’s physician network. In September 2016, he submitted complaints of wrongdoing to the Offices of Inspector General in the Department of Justice and the Department of Health and Human Services, prompting an investigation that lasted two years.

The case originally began with Mohatt filing two lawsuits under the False Claims Act’s qui tam provisions, which allow private individuals to file lawsuits on behalf of the federal government, and then share in the resulting recovery. Mohatt earned $5,411,421 for his share of the recovery in the cases.

In a statement, a representative from the Department of Justice’s Civil Division said the following: “Financial arrangements that improperly compensate physicians who make referrals to a hospital drive up the cost of health care services for everyone. This settlement demonstrates the Department’s determination to enforce federal laws aimed at preventing conflicts of interest between the financial interests of hospitals and physicians and the best interests of the patients they serve.”

Healthcare fraud costs the United States billions of dollars a year, and it is often only exposed as a result of reports from internal whistleblowers. To learn more about how you can report instances of fraud while protecting yourself, speak with a dedicated whistleblower lawyer at Kardell Law Group.


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