Halifax Health, accused of ripping off Medicare, could pay $350M in lawsuit



Volusia County's largest hospital could end up paying $350 million in damages because a judge just said Halifax Health ripped off Medicare.

Channel 9's Lori Brown has been following the accusations against Halifax for months and she spoke with whistle-blower Elin Kunz, who exposed the violations.

The judge found that Halifax Hospital paid illegal bonuses to doctors for sending patients to Halifax, validating Kunz' claim that the hospital put profits over patients.

"I'm happy. It means what I've said all along, the judge agreed with," Kunz said.

Kunz' lawsuit, which the United States federal government joined, claims the hospital ripped off taxpayers by defrauding the Medicare program.

"I was shut out and they went along and wouldn't do the right thing," Kunz said.

A federal judge decided Wednesday that the hospital was paying illegal bonuses to oncologists for referring patients to the hospital.

Halifax said the program was designed to retain critical cancer specialists.

The judge's ruling could cost the hospital $350 million.

"We're going to not only try to get back the money inappropriately taken from taxpayers, we're going to hit Halifax in the wallet which seems to be all they care about," attorney Marlan Wilbanks said.

Kunz, who worked in compliance, decided to file a lawsuit when she said her supervisors refused to come clean.

"At one time I was told my loyalty had to be to the hospital and not the government," Kunz said.

The judge has not decided if the fraud was intentional.

"We know you can't do profit sharing, and yet we still did," Kunz said.

The judge is leaving that for a jury to decide in March.

Halifax strongly denies that it submitted false Medicare claims.

It's illegal for hospitals to pay doctors to refer patients because reports show when doctors have a financial interest in referrals it leads to unnecessary treatments.


Halifax Health Statement on Judge’s Decision 

Halifax Health is disappointed by the judge’s decision that its incentive compensation program for the hospital’s employed medical oncologists did not comply with the Stark Law. The program was designed to retain mission-critical cancer specialists and encourage them to practice medicine efficiently and to contain costs. These are highly complex areas of the law and both internal and external legal counsel believed the hospital’s program complied with Stark Law.

 More importantly, the judge rejected the federal government’s request for a ruling that the hospital knowingly submitted false claims to Medicare, which is a critical component for any liability determination against the hospital. He said this is an issue to be decided by the jury.  The judge also rejected the government’s request for a summary judgment on damages, saying it is also an issue for a jury. Halifax Health strongly denies it knowingly submitted false Medicare claims and does not believe the government is entitled to any damages. These issues will be decided at trial.

 The judge’s decision focuses exclusively on one aspect of the oncology case, involving the Stark Law. The judge issued no findings whatsoever that the cancer specialists were overpaid for the patient care they provided or that they rendered any unnecessary or inappropriate care. The decision also has no impact on the case involving the neurosurgeons or the relator’s case.

 It is critical to remember that as a public, safety net hospital, Halifax Health is dedicated to providing high-quality care to all patients who come to us seeking treatment, regardless of whether they have insurance coverage or the ability to pay. This is also true for our medical oncology program, which serves as the only safety net provider for cancer care in our region. We will not waver from this commitment to our community as we continue to defend ourselves in this lawsuit.