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Judge OKs Memorial's $9.9M fraud settlement

  • Phillip Schaengold

A federal judge this week approved a $9.9 million settlement between the government and Memorial University Medical Center and related entities over allegations they filed false claims for Medicare reimbursements.

The settlement, the largest civil health care fraud recovery in the history of the Southern District of Georgia, stemmed from claims filed in 2011 by Phillip Schaengold, former Memorial Health Inc. president and CEO.

Memorial officials and U.S. Attorney Ed Tarver reported an agreement to settle the False Claims Act litigation in December.

U.S. District Judge Randal Hall approved the settlement Monday.

In addition to the monetary agreement, the settlement included an agreement by Memorial and its affiliates to enter into a five-year Corporate Integrity Agreement with the government’s Department of Health and Human Services. It requires them to retain an independent review organization to monitor and assess the hospital system’s compliance with federal law.

At the same time, Memorial agreed to settle — for an undislosed sum — Schaengold’s retaliatory discharge allegation, including his claims for attorney’s fees.

Schaengold was Memorial Health Inc. president and CEO beginning in June 2009. He was abruptly dismissed by Memorial’s board on Jan. 5, 2011.

Memorial Health Inc., the parent corporation of Memorial Health University Medical Center Inc., Provident Health Services Inc., and MPPG, Inc. d/b/a Memorial Health University Physicians were alleged to have violated the False Claims Act by submitting false and fraudulent claims for Medicare reimbursement based on prohibited referrals by physicians whose financial relationships violated federal law.

Memorial officials said they “cooperated fully with the government and acted in good faith. Memorial expressly denies allegations in the lawsuit and believes that its processes have been, and continue to be, compliant with all legal and regulatory statutes.”

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