University of Miami Medicare Fraud Leads to Millions Settlement

2021 has already seen the introduction of several new whistleblower reports as various organizations get caught doing some of the most morally dubious things. Criminal and fraudulent activity should never be encouraged, and whistleblowers are becoming more and more essential in the fight against crime.

One of the latest news from this area is coming from Florida, where the University of Miami was recently forced to pay millions in penalties after it was caught conducting Medicare fraud.

Per a Department of Justice (DOJ) document, a former senior executive at the University of Miami had noticed that it was conducting rampant Medicare fraud, duping patients hand over fist, and engaging in acts that were in direct violation of the False Claims Act.

The False Claims Act is a robust whistleblower protection act that protects whistleblowers, especially in criminal cases. It is also the nation’s first whistleblower legislation, being signed into law by President Abraham Lincoln in 1863. Under the legislation, whistleblowers become liable for monetary compensation when they provide valuable information to government officials in a case.

To qualify for the compensation, the whistleblower must provide information that helps catch a criminal who defrauded the government. The information will need to be concrete, and the whistleblower immediately becomes liable as long as their information leads to prosecution.

Usually, rewards under the False Claims Act stand between 15 and 30 percent of the sum recovered by the government.

How the UM Fraud Happened

In its press release, the DOHJ explained that the University of Miami had committed Medicare fraud on three fronts. The first occurred as the university knowingly made false filings for its hospital facilities. Medical systems are allowed under Medicare provisions to convert their physician offices to hospital facilities, but they will also need to satisfy certain requirements.

The university had seen that it would be more profitable to bill patients as a hospital facility. However, it is mandated under Medicare provisions to provide sufficient notice to patients that it would begin billing as a hospital facility. Nevertheless, the University of Miami conducted this conversion without giving proper notice.

Secondly, the university also allegedly conducted several unnecessary lab tests for kidney transplant patients at the Miami Transplant Institute (MTI).

The MTI is a medical program that the University of Miami runs in collaboration with Jackson Memorial Hospital. Whenever a patient enrolls in the medical program, the university would line several tests - many of which weren’t necessary. Nevertheless, the university would bill them to the patient’s account.

The third violation involved the university forcing Jackson Memorial to submit reimbursement claims for pre-transplant lab testings that were conducted by the MTI. These claims were for bloated fees, as the university had forced Jackson memorial to buy pre-transplant lab tests from it at much higher prices.

Bankruptcy Forced Their Hand

According to many sources, the University of Miami had been forced into Medicare fraud after it ran into significant debt a few years ago. The university had converted its school into a sprawling medical and academic healthcare system, incurring significant losses along the way.

The Justice Department has been investigating the university since 2013. This was the year that the whistleblower had reported the university. The whistleblower specifically claimed that the university’s top management officials had known about the fraud being committed, and they even went as far as encouraging it.

The whistleblower in question had worked as the Chief Operating Officer at the University of Miami’s Miller School of Medicine. He assisted the Justice Department’s investigation into the university - a case that also drew interest from the Federal Bureau of Investigation (FBI) and the Department of Health and Human Services. Most importantly, the two other agencies were interested in finding out who knew about this fraud and encouraged it.

So far, the agencies have failed to indict anyone. However, the University of Miami is set to pay a fine totaling $22 million. In accordance with the False Claims Act, the whistleblower will receive as much as $4 million.

Not a Win for Patients

In a statement, Juan Antonio Gonzalez, the Acting U.S. Attorney for the Southern District of Florida, chastised the University of Miami for its actions. In part, he said:

“Medical providers who submit fraudulent claims to our taxpayer-funded health care programs not only violate the public’s trust, they compromise the very integrity of these programs. Our office will aggressively pursue investigations against all providers who knowingly violate these billing rules no matter their size.”

Brian M. Boynton, the Acting Assistant Attorney General, also explained that acts like these are the primary reason why healthcare is so expensive in the United States. He added that the Justice Department will continue to track down and prosecute offenders who violate federal laws.

Of course, the people who were duped would be unable to get their money back - even though the Justice Department made a successful indictment. The patients had initially planned to file a class-action suit against the University of Miami, but the statute of limitations had prevented them.


Steve Halperin

New York trial attorney Steve T. Halperin is a well-known litigator with extensive knowledge of whistleblower laws and the New York False Claims Act. He has 28 years of experience as one of New York’s top tier attorneys. From the Manhattan offices of HalperinBikel, Steve’s whistleblower cases can run the gamut from lawsuits against healthcare. Whistleblowers: A New Yorker’s Step By Step Guide systems and providers cheating on New York Medicaid to private companies providing worthless services, or false billings by government contractors. With hundreds of winning verdicts and favorable settlements in healthcare and corporate cases, attorney Halperin’s meticulous preparation, courtroom acuity, and client-centered professionalism create remarkable outcomes.

To contact Steve: [hidden email] or 929.290.1266
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