Shands Healthcare to Pay $26 Million Settlement for Allegedly Submitting False Claims in Whistleblower/Qui Tam Case

Wednesday, August 21, 2013
By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

On August 19, 2013, Shands Healthcare agreed to pay $26 million to settle a lawsuit that stemmed from a whistleblower/qui tam claim. According to the settlement agreement, six of Shands’ Florida hospitals were accused of billing government health programs, such as Medicare and Medicaid, for inpatient claims that should have been coded as outpatient services for five years.

Click here to read the entire settlement agreement.

Shands Healthcare is the healthcare company that runs UF Health Jacksonville, formerly Shands Jacksonville. The six hospitals involved in the case are Shands at Starke Hospital, Shands Alachua General Hospital, Shands Jacksonville Medical Center, Shands at the University of Florida, Shands at Lakeshore and Shands at Live Oak.

Shands Hospitals Accused of Admitting Patients Unnecessarily.

The lawsuit originated from a whistleblower/qui tam claim filed in 2008, by a healthcare consultant hired to audit Shands hospitals’ billing practices. The whistleblower claimed his audit showed inconsistent billing processes. According to the Orlando Sentinel, the healthcare consultant claimed Shands allegedly billed Medicare and Medicaid for overnight inpatient admissions rather than the less expensive outpatient services for some patients. Based on this claim, the government alleged that the six Shands hospitals knowingly submitted false claims from 2003 to 2008, according to the Orlando Sentinel.

To read the Orlando Sentinel article, click here.

Shands Healthcare made it clear that the settlement represents no admission of liability. However, the hospital system will pay $25.2 million to the United States under the Medicare program and $829,600 to the State of Florida under the Medicaid program.

Whistleblower’s Settlement Share Undetermined.

According to the settlement agreement, the whistleblower’s settlement share has not been determined.  Under the False Claims Act (31 U.S.C. Sect. 3730), whistleblowers stand to gain substantial amounts, sometimes as much as thirty percent (30%) of the amount the government recovers. Such awards encourage employees and contractors to report fraud. To learn more on whistleblower cases, read our two-part blog. Click here for part one, and click here for part two.

Opportunities for Improvements at Shands Hospitals.

In a press release, officials at Shands announced that the hospital system did an independent audit and found opportunities for improvement to their billing processes. This includes the use of improved software, supplemental employee training, and the implementation of new policies and procedures. To read more from Shands, click here for the press release.

Most Qui Tams Filed by Doctors, Nurses and Employees.

From our review of qui tam cases that have been unsealed by the government, it appears most of these are filed by physicians, nurses or hospital staff employees who have some knowledge of false billing or inappropriate coding taking place. It is rare that an outside consultant would have this information or have access to documentation on this. Normally the government will want to see some actual documentation of the claims submitted by the hospital or other institution. Usually physicians, nurses or staff employees have access to such documentation.

Contact Health Law Attorneys Experienced with Qui Tam or Whistleblower Cases.

Attorneys with The Health Law Firm also represent health care professionals and health facilities in qui tam or whistleblower cases both in defending such claims and in bringing such claims. We have developed relationships with recognized experts in health care accounting, health care financing, utilization review, medical review, filling, coding, and other services that assist us in such matters. We have represented doctors, nurses and others as relators in bringing qui tam or whistleblower cases, as well.

To contact The Health Law Firm, please call (407) 331-6620 or (850) 439-1001 and visit our website at


What do you think of this settlement? Are unnecessary admissions into hospitals a big problem? Please leave any thoughtful comments below.


Modern Healthcare. “Shands Healthcare to Pay $26 Million Over False Claims.” Modern Healthcare. (August 19, 2013). From:

Jameson, Marni. “Shands Hospital Pays $26 Million in Fraud Settlement Case.” Orlando Sentinel. (August 19, 2013). From:,0,3255116.story

Blouin, Melissa. “Shands Announces Settlement Agreement, Allegations of Billing Process Issues.” UF Health. (August 19, 2013). From:

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. The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone: (407) 331-6620.

Tag Words: Shands Hospital, billing and collections, inpatient, outpatient, billing audit, false claims, Medicare false claims, false claims act, unnecessary procedures, false billing, Medicare, Medicare fraud, Medicare audit, Medicaid false claims, Medicaid, Medicaid false billing, whistleblower, qui tam, qui tam lawsuits, whistleblower attorney, whistleblower lawyer, whistleblower protection, legal representation, Department of Justice (DOJ), defense attorney, defense lawyer, The Health Law Firm

"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.
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