By Dan Christensen, FloridaBulldog.org
The Florida Attorney General’s office has demanded that Broward Health pay more than $5.3 million to settle state Medicaid fraud claims uncovered during a federal whistleblower investigation.
Broward Health paid $69.5 million to settle the federal case last summer. The arrival of Attorney General Pam Bondi’s ominous demand seeking millions more in state damages comes amid snowballing legal troubles at the beleaguered North Broward Hospital District.
The specific settlement demands $5,325,671, an amount that Bondi’s office said is “recoverable under the Florida False Claims Act.”
“If this matter is not resolved through settlement, we may pursue Florida False Claims Act litigation in Leon County Circuit Court, seeking treble damage and civil penalties of not more than $11,000 for each false claim submitted,’’ says a March 10 letter signed by Assistant Attorney General Jill Bennett.
Bondi’s office released a copy of the letter in response to a public records request from FloridaBulldog.org.
Florida and the federal government share the cost of the state’s Medicaid program, which provides medical coverage to low-income individuals and families.
The letter accuses Broward Health of participating in an illegal scheme to commit Medicaid fraud with nine of its doctors. The letter says Broward Health violated the federal Physician Self-Referral Law, the Florida Anti-Kickback Statute and the Florida False Claims Act.
The state’s allegations mirror the federal Medicare/Medicaid case made against Broward Health.
The nine physicians whose contracts Florida contends were “improper and in violation of’’ the Physician Self-Referral Law are the same doctors identified earlier in the federal probe. Those contracts date as far back as 2000.
The doctors: orthopedists George Caldwell and Erol Yoldas; cardiologists Michael Chizner, Violeta McCormack, John Rozanski and Ashok Sharma; oncologists Hector Rodriguez-Cortes, Rudolph Roskos and Shazia Zafar.
Bondi’s office declined further comment “as this matter is active and ongoing.”
Broward Health Chairman David Di Pietro said, “We’ll look into the legality of the claim and figure out the best way to resolve it in the best interest of the district.”
FloridaBulldog.org reported in October that the Justice Department had discussed the case with Bondi’s office last June and that Bondi’s office was reviewing the matter.
In advance of the federal settlement, the district’s lawyers cautioned that Bondi could sue to recover Florida’s Medicaid losses from the scheme.
“I don’t think it’s likely,” said attorney Linda Baumann, of Washington, D.C.’s Arent Fox. Still, she said, it was possible if Florida needs “some extra money, because it’s a relatively easy way.”
A ‘scheme of mutual enrichment’
Federal court documents describe the huge Broward Health healthcare fraud as an illegal “scheme of mutual enrichment” between the hospital system and its doctors.
The settlement capped a five-year-old federal investigation that began with a 2010 federal False Claims Act lawsuit filed in secret by whistleblower Dr. Michael Reilly. The government paid the Fort Lauderdale orthopedic surgeon a $12-million reward, or a bit more than 17 percent of the settlement amount.
Broward Health paid Reilly an additional $860,000 for attorney’s fees and costs, bringing the district’s outlay to $70.4 million. That did not include more than $11 million the district has paid to Baumann’s law firm for legal advice in the matter.
The state’s Medicaid damages claim is the latest in a series of recent shocks to Broward Health, a public hospital system that provides services to both paying clients and those who can’t afford to pay.
The first blow came Jan. 23 with the suicide of the district’s CEO/President Dr. Nabil El Sanadi. Two more shocks hit on Jan. 29, the day of El Sanadi’s funeral.
The first came in a letter from Gov. Rick Scott’s Chief Inspector General Melinda Miguel, announcing that her office would conduct a review of every contract entered into by Broward Health since July 1, 2012. The second was contained in an email to Broward Health’s board of commissioners from well-known Miami private investigator Wayne Black, who’d been quietly hired by El Sanadi in the spring of 2015 to look into alleged corruption.
Black’s email disclosed the existence of an FBI investigation into possible procurement fraud, kickbacks and other crimes at Broward Health, and asserted that Broward Health General Counsel Lynn Barrett had not cooperated and had withheld evidence. Barrett has denied Black’s claims.
A few weeks later, FloridaBulldog.org reported that a Fort Lauderdale federal grand jury had subpoenaed Broward Health’s records about former procurement officer Brian Bravo and 16 companies that do business with the district. The records sought go back 10 years.
Counsel Barrett generated significant controversy in early February when she advised the board to meet “in the shade,” that is not in public, to discuss Black’s assertions about her. The attorney general’s office later issued an opinion declaring Barrett’s advice to be wrong.
In the following weeks, FloridaBulldog.org disclosed recent plans by Broward Health to award a $71.4 million no-bid contract for advertising to a politically connected advertising firm, Zimmerman Advertising. Months earlier, Zimmerman threw a fundraiser for Broward County Judge Nina Di Pietro, the wife of Broward Health Chairman David Di Pietro.
The Bulldog also reported last month that in 2012 Broward Health’s board of gubernatorial appointees awarded a 25-year, no-bid contract to provide radiation oncology services to a company with financial ties to Gov. Scott. The contract is with 21st Century Oncology, a Fort Myers cancer care company that’s owned by Vestar Capital Partners.
Scott’s financial disclosure files indicate that at the time of the board’s vote to award the contract he owned a $210,000 indirect interest in 21st Century Oncology via his investment in Vestar Capital. 21st Century Oncology later donated nearly $400,000 to Gov. Scott’s re-election campaign.
More controversy followed news that Broward Health Acting President/CEO Kevin Fusco signed deals in February to pay a total of more than $400,000 in hush money to the district’s former chief financial officer who was fired after publicly criticizing the proposed $71.4 million no-bid deal with Zimmerman Advertising. Fusco, whose signing authority is limited to $250,000, did not seek board approval for that deal, or a second deal that paid another executive $537,000 to go away quietly.
On Wednesday, the board voted to replace Fusco as chief executive and installed Pauline Grant as Interim CEO/President. Grant was chief executive of Broward Health North in Pompano Beach.
Di Pietro led a push to fire General Counsel Barrett, but failed on a 4-3 vote of the board. Instead, Barrett was put on a 30-day review plan and her performance will be considered again next month.