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New Jersey Hospital Settles Qui Tam Case

The U.S. Attorney’s Office for the District of New Jersey has announced that the Cooper Health System, Inc. dba Cooper University Hospital (“Cooper”) has agreed to pay $12.5 million to settle a pending qui tam action. According to Cooper’s website, Cooper University Health Care is the clinical campus of Cooper Medical School of Rowan University in Camden, New Jersey. Cooper states its network of facilities currently serves more than half a million patients a year.

In 2008, a Complaint was filed by whistleblower Nicholas Depace, a cardiologist, under the qui tam provisions of the False Claims Act. The whistleblower alleged that Cooper violated state and federal anti-kickback laws by paying improper fees to physicians in order to induce them to refer patients to Cooper.

Specifically, the whistleblower alleged that between October 2004 and December 2010, Cooper recruited local outside physicians to serve on its heart institute advisory board and paid them approximately $18,000 each. The government contends that at least one purpose of the payments was to induce the physicians to refer patients to Cooper. The Complaint further alleged that billing Medicare and Medicaid for services stemming from the tainted referrals violated the False Claims Act.

Cooper has agreed to pay $10.2 million to the U.S. government and $2.3 million to the State of New Jersey to resolve the allegations. The whistleblower will receive approximately $2.3 million of the settlement proceeds as his reward under the qui tam provisions of the False Claims Act.

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