A recent lawsuit against Mayo Clinic ended with a settlement of $1.26 million on August 2, 2012. The whistleblower lawsuit focused on false claims for billings to Medicare and Medicaid programs from the clinic's Rochester, Minnesota pathology laboratories. The complaint alleged that Mayo billed the government for a frozen tissue slide for quick analysis and a permanent tissue slide, but that the permanent slides were never made or examined.
The lead whistleblower, who is both a physician and a lawyer, discovered that Mayo Clinic was billing for two sets of pathology tests but only performed one set in his patients' cases. As a result, he filed a lawsuit against the clinic in 2007 under the qui tam, or whistleblower, provisions of the False Claims Act. Three of his patients and their families joined in the lawsuit.
This act allows private citizens to file a lawsuit on behalf of the United States government and to share in any money collected from the defendants. The lawsuit was kept under seal until September 2010, when the U.S. Department of Justice intervened in the case and began to subpoena billing records.
Mayo Clinic initially paid $263,000 to the government and with this settlement will pay an additional $1 million within seven business days. When the government receives this money, $229,822 will be paid to the whistleblowers. In addition, Mayo Clinic is required to pay the whistleblowers' attorney fees and legal expenses.
Although Mayo Clinic has agreed to the settlement, it denies any wrongdoing. A spokesman stated that the clinic entered the settlement to avoid a long legal battle, calling the case a "billing error issue."
Source: Star Tribune, "Mayo settles false billing suit for $1.26 million," Maura Lerner, Aug. 2, 2012