Faith-based Florida health system will pay $1.5M to settle fraud allegations

With a stated mission “to make hope, healing and wellbeing accessible to every person as an expression of God’s love,” Jacksonville’s Baptist Health System just agreed to pay $1.5 million to settle allegations it defrauded the government under the False Claims Act.

As opposed to for-profit organizations, the nonprofit, tax exempt, Baptist Health System was created to serve the medical needs of the community — not to generate profit for shareholders.

It’s network includes seven hospitals across Northeast Florida, the Baptist MD Anderson Cancer Center in Jacksonville, as well as nearly 2,000 physicians and more than 200 patient centers and clinics.

Medicare, a federal health insurance program used by many patients aged 65 and older, typically covers a significant portion of health care costs, leaving the patient responsible for paying the remainder.

But the Department of Justice alleges that from Jan 1, 2016, to Aug. 15, 2022, Baptist Health intentionally directed its subsidiaries to offer discounts to Medicare patients, regardless of their financial need, entitling them to more than 50% off their portion of the bill — in return for their commitment to use or recommend Baptist Health’s services.

Combating health care fraud

Nonprofit health care systems are typically created by charitable groups or religious organizations. In this case, the Baptist Health System was established after members of the Southern Baptist Convention responded to a hospital-bed shortage by building Baptist Memorial Hospital in Jacksonville.

Because they must offer more community oriented health programs, like free or reduced care for those unable to pay, nonprofit health systems are pivotal in providing care to underserved populations and ensuring health care accessibility to all patients, regardless of their financial situation.

In the fight against corruption, the False Claims Act allows the government to hold organizations accountable for defrauding government programs. The federal “Anti-Kickback Statute” makes it illegal for anyone involved in federal health care programs to offer, pay, or accept any form of payment in exchange for referring people to specific health care services that the government pays for.

Baptist Health voluntarily discloses potential violations

On July 15, 22, Baptist Health voluntarily disclosed that some of their legacy patient discount policies could potentially violate federal fraud laws — and willingly discontinued them.

They also conducted an internal compliance review and provided the government with a detailed supplemental disclosure — “significant steps” according to the DOJ, that entitled Baptist Health to some “credit” for cooperating with the investigation.

In a news release announcing the settlement on May 3, Principal Deputy Assistant Attorney General Brian Boynton, head of the Justice Department’s Civil Division, said, “We encourage providers to mitigate the consequences of prior improper conduct by making timely self-disclosures, cooperating with our investigations and adopting enhanced compliance procedures.”

Further, U.S. Attorney Roger Handberg said the settlement serves as a great example of his office’s commitment to protecting and preserving taxpayer funded health care programs, adding that “self-disclosures like this not only help crucial federal health care programs to recoup funds, but are also in the best interests of health care providers themselves.”

As noted in court documents, the agreement, is neither an admission of liability by Baptist Health nor a concession by the government that its claims are not well founded.

Per the settlement, Baptist Health must pay $1,500,000, plus interest, to the government by May 18, 2024.

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