November 6, 2020
Miami, FL
Stumphauzer, Foslid, Sloman, Ross, and Kolaya's Jeffrey Sloman was referenced in a Miami Herald article on a proposed $22 million settlement of a whistleblower lawsuit that Sloman filed on behalf of his client Jeffrey Lord against UM Health System.
By Jay Weaver and Daniel Chang, Miami Herald | November 4, 2020
A federal lawsuit unsealed after seven years of secrecy has revealed fraud allegations by a former University of Miami senior executive that the school's healthcare system billed millions of dollars in unnecessary lab tests to Medicare and stuck patients with hidden charges for clinic visits.
The U.S. Justice Department began investigating the allegations after they were first raised by the former chief operating officer of the UM Miller School of Medicine, Jonathan "Jack" Lord, who filed a whistle-blower lawsuit in 2013.
Lord accused the university of filing false claims with Medicare for unnecessary organ transplant tests and overcharging patients for clinic visits during a period when UM was struggling with massive debt after undertaking an ambitious transformation of the medical school into a sprawling academic healthcare system under past president Donna Shalala.
Court records show UM and the Justice Department, which joined Lord's lawsuit, have reached an "agreement in principle." The proposed settlement is likely to cost the private university $22 million to resolve the so-called False Claims Act case.
UM said in a prepared statement, "We hope to finalize the settlement in the coming weeks," and added that the university has not admitted any wrongdoing.
Lord, who was forced out by Shalala seven years ago, is expected to receive about $4 million as a reward for initiating the suit against his former employer.
Significantly, the imminent settlement means that the Justice Department has adopted a handful of key allegations in Lord's complaint against Coral Gables-based UM, which operates a medical school out of the public Jackson Memorial Hospital in Miami and a sprawling UHealth network across four counties. The lawsuit was unsealed by order of U.S. District Judge Cecilia Altonaga.
The U.S. Attorney's Office in Miami and Justice Department, which prosecuted Lord's whistle-blower case, declined to comment about the planned settlement.
Lord's suit claims that illegal practices were "not only well known to UM at the highest corporate level, but were encouraged" — accusations that triggered "parallel criminal and civil investigations" into UM's allegedly fraudulent billing of Medicare for organ transplant surgeries and other patient services. However, the criminal probe led by the FBI and the Department of Health and Human Services concluded without any charges against the university or any employee, according to several sources familiar with the investigation.
Under the proposed settlement, UM has agreed to pay the federal government civil damages for overcharging the taxpayer-funded Medicare program for pathology lab services at Jackson Memorial. Lord's whistle-blower suit claims that UM's labs improperly billed the Medicare program for thousands of unnecessary pathology tests involving kidney and other organ transplant surgeries.
The university has also agreed to pay the Justice Department for imposing a surcharge on patients at UM-affiliated medical offices without notifying them of the actual cost for each visit. The patients were charged an extra hospital-based fee — sometimes in the hundreds of dollars — for visits to doctors' offices that were not located at UM's hospital campus in Miami.
UM's planned settlement with the federal government will resolve potentially hundreds of millions of dollars in disputed false claims over lab tests and patient surcharges spanning nearly a decade. The agreement will allow the Medicare program to keep most of UM's settlement payment. Lord will receive about 20% of the payment under a Justice Department formula for False Claims Act cases.
The other central claim in Lord's suit focuses on a "facility fee" that UHealth charged at outpatient clinics and doctors' offices within its network in South Florida — billing for use of the facility in addition to the physician's services without properly notifying patients and federal regulators of the surcharge. Medicare rules require UHealth to notify patients and federal regulators in writing of any facility-fee surcharge added to a regular medical bill.
Lord's whistle-blower suit, filed under seal in July 2013, was brought by his attorney, Jeffrey Sloman, and names only the university as a defendant. Lord's attorney, with the Miami law firm Stumphauzer Foslid Sloman, said he could not comment on the case until there is a settlement.
The article, published by the Miami Herald, is available at: miamiherald.com.
Stumphauzer Foslid Sloman Ross & Kolaya, PLLC (SFS) is a boutique full-service litigation firm based in Miami, Florida, that focuses on civil litigation, government regulatory enforcement matters, white collar criminal litigation, internal investigations, and whistleblower suits. The SFS lawyers litigate large, high-stakes or bet-the-company cases, but its attorneys take immense pride in their ability to efficiently handle disputes of all sizes. The firm is comprised of former BigLaw partners and high-ranking federal prosecutors, including the former chair of the Miami litigation practice of one of the largest law firms in the world and the United States Attorney for the Southern District of Florida. Colleagues, clients, and legal observers recognize the SFS lawyers as experts and leaders in their respective fields of practice. The firm and its lawyers have been recognized in Chambers & Partners, The Legal 500 United States, The Best Lawyers in America, Florida Super Lawyers, Florida's Legal Elite, and U.S. News – Best Lawyers.
