Columbia University Agrees to Pay $9.5 Million For Improper Billing in Connection With Medical Research Grants from NIH

Friday, August 12, 2016
By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

On July 14, 2016, Columbia University agreed to pay $9.5 million to the U.S. government in order to resolve a False Claims Act (FCA) suit. The suit alleges that the prominent New York university sought and received excessive cost repayments in connection with federal research grants, the Assistant U.S. Attorney who is prosecuting the case stated.  It is being brought in the Southern District of New York.

You can read the settlement in full here.

The press release from U.S. Attorney Preet Bharara’s office came a day after a New York federal judge approved the settlement between the university and the U.S. government.  The deal was made three years after a whistleblower filed a qui tam (False Claims Act or "FCA") complaint in 2013 in which the government intervened.  Click here to read the U.S. Attorney's press release.

Improper Billing Connected with Medical Research Grants.


According to federal officials, Columbia University improperly charged rates improperly for use of on-campus facilities and administrative services.  They were allegedly trying to recoup costs for medical research that was conducted in off-campus facilities using grants funded by the National Institutes of Health (NIH).

Although this research took place at two off-campus buildings owned by the state of New York, the university applied a higher “on-campus” indirect cost rate to 423 NIH grants rather than the “off-campus” facilities and administrative rate. “All institutions that receive federal grant money must abide by applicable rules and regulations governing the use of the funds and the extent to which costs incurred by the institution are reimbursable,” prosecutor Bharara said in a statement. “For years and for over 400 research grants, Columbia improperly sought and recovered inflated cost recoveries.”

The period in which this occurred spanned from July 1, 2003, through July 30, 2015, according to the pleadings filed in the U.S. Southern District of New York. The net result of the improper rate application was “excessive indirect cost recoveries for the covered grants,” according to federal officials.


Qui Tam (Whistleblowers) Complaint.


Columbia University’s allegedly illegal activities came to light through a qui tam complaint that was filed July 19, 2013 pursuant to the FCA. The NIH grants pertained to medical research performed by the Columbia Department of Psychiatry and Columbia Department of Neuroscience, according to the U.S. Department of Justice.

The U.S. government intervened in the suit brought against Columbia University and added the trustees of Columbia University as defendants, according to the intervening complaint and settlement documents.

You can read the complaint in full by clicking here.


Taking Advantage of Federal Research Grants.


According to the Department of Justice (DOJ), the on-campus rate is typically more than double the off-campus rate. During the relevant period, Columbia’s on-campus facilities and administrative rate was 61 percent and its off-campus F&A rate was 26 percent.

Scott J. Lampert, special agent in charge of the Office of Inspector General (OIG) of the U.S. Department of Heath and Human Services(HHS), said in a statement that the actions taken by Columbia were “disturbing.”

He also stated, “Money gained by such behavior deprives other research programs of funds that could yield life-altering new treatments. We will continue to work with our law enforcement partners to ensure institutions [that] engage in wrongful activity are held accountable.”

Click here to read one of my prior blogs on medical research grants.


Contact Health Law Attorneys Experienced in Representing Clinical Researchers, Principal Investigators, Health Care Professionals and Providers.


At the Health Law Firm we provide legal services for all physicians and scientists performing clinical research, medical research or other academic studies.  We represent health care providers and professionals;  but we also bring and defend false claims act cases (qui tam cases or whistle blower cases). Our representation includes physicians, nurses, dentists, psychologists, psychiatrists, teaching hospitals, medical groups, institutions, and other health care providers.  In the area of investigations into allegations of misconduct in science or medical research fraud, we most often represent the individual grant applicants and recipients, clinical researchers or principal investigators.
Our representations include university, Institutional Review Board (IRB) and Misconduct in Science Committee (MISC) investigations and hearings, federal investigations and hearings, and state and federal court litigation.

We are also experienced in professional license defense, clinical privileges and peer review defense, representation in peer review investigations, representation in research fraud investigations, and administrative hearings. To contact The Health Law Firm, please call (407) 331-6620 or (850) 439-1001 and visit our website at www.TheHealthLawFirm.com.


Source:

Lee, Suevan. “Columbia U. To Pay US Govt. $9.5M For Improper Rate Billing.” Law360. (July 15, 2016). Web.


About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law. He is the President and Managing Partner of The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida area. www.TheHealthLawfirm.com The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone; (407) 331-6620.


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"The Health Law Firm" is a registered fictitious business name of George F. Indest III, P.A. - The Health Law Firm, a Florida professional service corporation, since 1999. Copyright © 2016 The Health Law Firm. All rights reserved.


8/12/2016

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