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Two Memphis Healthcare Facilities Named in Whistleblower Lawsuit

Methodist Healthcare and West Cancer Center, both located in Memphis, Tennessee, were recently named in a whistleblower lawsuit revolving around illegal kickbacks to doctors.

Former Methodist University Hospital CEO Jeff Liebman and former Vice Chancellor for the University of Tennessee’s Health Science Center Dr. David Stern filed the whistleblower lawsuit, alleging the fraudulent scheme resulted in more than $800 million in damages to Medicare and Medicaid.

The lawsuit was originally filed in 2017.

Case background

The alleged kickbacks occurred between 2012 and 2018. According to the lawsuit, Methodist Healthcare paid West Cancer Care physicians kickbacks of more than $400 million in that time. It also claims doctors received kickbacks for referring cancer patients for hospital admissions, radiation, outpatient procedures and chemical infusions.

Methodist took part in the 340B program, allowing the hospital get drugs at significant discounts. The hospital would get those drugs at a deep discount, then still charge patients’ insurance at higher rates. The difference would be split between physicians at West Cancer Care and Methodist.

The lawsuit also alleges Methodist paid West $25 million to manage the business at the infusions center at the hospital, and also paid off $7 million in debt incurred by West, including $3.5 million in personal debts.

Liebman and Stern allege the business deal existed to give Methodist a competitive edge over tis healthcare rival, Baptist Hospital. This resulted in West ending its two-decade relationship with Baptist to bring more patient referrals to Methodist, which would then increase rates.

For more information about healthcare fraud and the steps you should take if you are aware of fraudulent activity occurring within a healthcare organization, contact an experienced whistleblower attorney at Kardell Law Group.

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