Whistleblower Lawsuit Accuses Iasis Healthcare of Medical Fraud

By Aaron Poehler

Published on August 15, 2007

Under the terms of the suit, the legitimacy of thousands of Medicare and Medicaid reimbursement claims filed by Iasis is disputed. Frazier also alleges that the company illegally compensated doctors by offering them perks including sham consulting contracts, below-market office rent, and other improper incentives and payments in exchange for patient referrals to Iasis-operated hospitals.

Should Iasis be found liable, the company could be required to pay three times the government's losses plus $5,500 to $11,000 for each false claim. Based in Tennessee, Iasis currently operates 17 hospitals across the U.S. with a total annual net revenue around $1.8 billion.

The suit was originally filed in 2005 but a judge recently ordered the case unsealed after the U.S. Department of Justice filed notice that it has postponed deciding whether or not to intervene in the case until after completing an investigation of the suit's claims.

Under the qui tam, or whistleblower, provisions of the False Claims Act, should Iasis be found responsible Frazier would be eligible to receive a percentage of any award or settlement amount.

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