A whistleblower's allegations of illegal kickbacks being paid by Cooper Health System and Cooper University Hospital triggered an investigation by the U.S. Department of Justice and the New Jersey Attorney General's Office. The investigation culminated in a $12.6 million Medicaid/Medicare fraud settlement.
Physicians outside the Cooper network were invited to join the Cooper Heart Institute Advisory Board. The Board's mission was to build the cardiology program at Cooper, but it was revealed as a sham that was actually used, at least in part, to provide illegal kickbacks to the tune of $18,000 a year to member physicians.
Kickbacks, consulting fees or compensation packages - however they are labeled - violate the Federal False Claims Act because of the potential for improper influence over Medicaid and Medicare patients. When a doctor is paid a kickback for referring a patient, federal anti-kickback laws are violated. Submitting a reimbursement claim to Medicare or Medicaid for treatment that resulted from a violation of an anti-kickback law is then a false claim, subject to the False Claims Act.
Dr. Nicholas DePace had been recruited to be a member of the Cooper Heart Institute Advisory Board, but upon scrutinizing the Board's mission and payment structure opted not to join. Instead he pursued a False Claims Act lawsuit against Cooper because of the illegal nature of the board members' payment structure. He stands to receive a $2.4 million whistleblower award for coming forward with evidence of the Medicaid/Medicare fraud scheme.
Cooper denies any wrongdoing despite agreeing to a settlement of the fraud claims presented in the qui tam lawsuit.
Source: Forbes, "Whistleblower Lawsuit Yields $2.4 Million For New Jersey Cardiologist," January 31, 2013