Fraud Suit Against AIDS Healthcare Foundation Nixed - Gay City News | Gay City News Fraud Suit Against AIDS Healthcare Foundation Nixed - Gay City News | Gay City News
Quantcast

Fraud Suit Against AIDS Healthcare Foundation Nixed

Michael Weinstein, president of the AIDS Healthcare Foundation. |
AIDSHEALTH.ORG

BY DUNCAN OSBORNE | A federal judge in Miami has dismissed a fraud lawsuit brought against the AIDS Healthcare Foundation (AHF), finding that federal law allowed the agency to pay bonuses to its employees for linking clients who test positive for HIV to care even if those clients ultimately chose to get that care from AHF.

“The fact that the federal government and the State of Florida each formally declined to intervene in the legal action brought on behalf of three former AHF employees spoke volumes about the merits of the case, and today’s dismissal of these unfounded whistleblower claims by the court is a tremendous victory not only for AHF, but for the patients and public we serve daily,” Michael Weinstein, AHF’s president, said in a June 20 statement. “We thank the court for its wisdom in this ruling.”

The lawsuit, which was filed in 2014 by three former AHF employees, alleged that bonuses and incentives paid to AHF employees were effectively kickbacks for steering HIV-positive clients to AHF for their care and treatment. Since that care was reimbursed by the federal government and Florida, those payments violated the federal False Claims Act, a federal anti-kickback law, and a similar Florida statute, the lawsuit alleged.

US judge finds no evidence of illegal kickbacks in HIV-positive patient referral

As fraud whistleblowers, the three employees, Shawn Loftis, Mauricio Ferrer, and Jack Carrel, would have been entitled to a percentage of any judgment or settlement against AHF, which could have run to tens of millions of dollars. AHF has an annual budget of roughly $300 million, with a substantial portion of that money coming from Medicaid, the government-run health insurance plan jointly funded by states and the federal government, and other federal government funders. The agency operates in 15 states and the nation’s capital. A loss in this case could have crippled AHF.

While federal law bars medical providers from paying clients and non-employees to select a particular provider, it carves out a safe harbor for employee compensation, allowing employers to incentivize employees for performance.

In any case, AHF said its employees presented clients who tested positive for HIV with a list of medical providers that included AHF and allowed the client to select their own provider.

“What the regulatory history makes clear is that by enacting the employee safe harbor, Congress has already made a considered policy choice to exempt the conduct with which [the plaintiffs] take issue,” Judge Kathleen Williams wrote in her June 9 decision. The decision was filed under seal and was unsealed on June 20.

Currently, AIDS groups urge people who test positive for HIV to immediately enter treatment. Early treatment keeps HIV-positive people healthy and can reduce the amount of virus in their bodies to the point that they cannot infect others. This treatment as prevention philosophy is the prevailing view among AIDS groups, researchers, public health officials, and doctors.

The possibility of a lawsuit for paying incentives to employees to do more HIV testing and make more referrals to treatment could have led other AIDS agencies to curtail their HIV testing efforts.

False Claims Act lawsuits, such as the one filed by the three former AHF employees, are first filed under seal. The government is required to investigate the allegations and decide if it will join the lawsuit. These lawsuits are rarely successful when the federal government declines to join the lawsuit, as was the case here.

But the federal government went further in this case by filing a “Statement of Interest” in which it said that the plaintiffs had misconstrued federal law. One federal program that is named for Ryan White, an HIV-positive Indiana teenager who died in 1990, encouraged referrals by employees to their employer, the government wrote.

“[The plaintiffs] rest their claim on the purely legal argument that a bona fide employee of a Ryan White Program grant recipient, such as AHF, may not be paid for referring patients to his or her own employer to receive appropriate services,” the government wrote in its May 30 statement. “[They] are incorrect… The Ryan White Program’s statutes and regulations do not restrict grant recipients, such as AHF, from paying employees to refer patients needing medical care to that same grant recipient if, as here, it is an otherwise ‘appropriate’ Ryan White provider…[T]he relevant legislative history indicates that Congress embraced the notion of ‘one stop shopping’ for patients with HIV/ AIDS.”

Leave a Reply

Your email address will not be published. Required fields are marked *


three + one =