Settlement Reached in IU Health Fraud Case

Posted: Updated:

Indiana University Health and HealthNet Inc. have reached an $18 million settlement with the Indiana Attorney General's Office and the U.S. Department of Justice. The DOJ says the settlement resolves a lawsuit alleging the violation of federal and state false claims laws through an illegal kickback scheme.

The lawsuit, filed in federal court in Indianapolis, alleged that IU Health gave HealthNet an interest-free line of credit with a balance of more than $10 million between May 1, 2013 and August 30, 2016. The arrangement was allegedly intended to induce HealthNet to refer OB/GYN patients to IU Health Methodist Hospital in downtown Indianapolis.

Indiana Attorney General Curtis Hill's office says any claims for services provided to patients referred by HealthNet to IU Health through this arrangement were false or fraudulent. Both state and federal officials say the conduct also violated the federal Anti-Kickback Statute, which prohibits "an entity from offering or paying money to induce another entity to refer a patient to a provider for products or services for which payment may be made in whole or in part under a federal health care program such as Medicaid."

HealthNet operates medical clinics throughout the state and Hill's office says IU Health OB/GYN practitioners have regularly provided services in those clinics. However, through the arrangement between the two entities, the practitioners allegedly directed patients to IU Health facilities for further treatment, instead of explaining the patients' options, as required by law.

"When public funds are designated to benefit those who are most vulnerable, companies receiving those funds have a special obligation to act in good faith," said Hill. "The arrangement between IU Health and HealthNet took advantage of Hoosiers on Medicaid by limiting their healthcare options exclusively to those within the IU Health Network, contriving a system that benefited only IU Health."

As a result of the settlement, IU Health and HealthNet will each pay $5.1 million to the United States and $3.9 million to the state of Indiana. The DOJ says $2.8 million of the federal share of the recovery will be awarded to Judith Robinson, a former employee of both IU Health Methodist Hospital and HealthNet who filed the lawsuit.

  • Perspectives

    • Cyber Security: Out of Your Control - or Not?

      Good chance YOU have been a victim of a cyber security attack!  When a company gets hacked, you and other customers become the “victims” of the breach. That puts your identity at risk!  The FTC estimates 9 million Americans are victims of identity theft each year!  What’s the greatest potential for identity theft?  On-line shopping! Yikes!



Company Name:
Confirm Email:
INside Edge
Morning Briefing
BigWigs & New Gigs
Life Sciences Indiana
Indiana Connections


  • Most Popular Stories

    • An abandoned East Chicago neighborhood is fenced off for safety. (photo ctsy: The Times of Northwest Indiana)

      New Housing Coming to East Chicago

      The Indiana Housing & Community Development Authority has selected a Chicago nonprofit to participate in a new workforce housing program in East Chicago, according to our partners at The Times of Northwest Indiana. The nonprofit organization A Safe Haven Foundation was awarded a $700,000 grant from the IHCDA that will support the new construction of single-family homes in the West Calumet neighborhood. 

    • (photo courtesy Joseph Pete/The Times of Northwest Indiana)

      ArcelorMittal to Idle Furnace at Indiana Harbor West

      ArcelorMittal plans to idle a blast furnace at its Indiana Harbor West in East Chicago. A spokesperson tells our partners at The Times of Northwest Indiana employees will be reassigned and there will be no layoffs as a result of the move. 

    • A New Way of Thinking for Drug Addiction Recovery

      The long war against drug addiction continues to rage, with the opioid crisis representing the latest front of the battle. As with any long fight, our strategy must change as the forces of death and destruction find new ways to attack those most vulnerable. According to the Centers for Disease Control and Prevention, 68% of the 70,200 drug overdose deaths in 2017 involved an opioid – six times higher than in 1999.

    • Graduates from the 1st cohort for manufacturing at Branchville Correctional Facility (photo ctsy: Dept of Corrections)

      Manufacturing Skills Training for Inmates

      The Indiana Department of Correction is trying to help fill voids in the state’s manufacturing workforce by preparing and training low-risk inmates before they are released. Branchville Correctional Facility in downstate Perry County just graduated its first cohort of the Catapult Training Program, following a four-week course in basic manufacturing skills. The facility is classified as a Level II Low Medium Security Correctional Facility. In an interview with...

    • Calumet Specialty Sells Texas Refinery

      Indianapolis-based Calumet Specialty Products Partners (Nasdaq: CLMT) has closed on the sale of its San Antonio,Texas refinery, crude oil terminal and pipeline to Starlight Relativity Acquisition Co. LLC. Starlight agreed to pay $63 million in cash for the plant, property and equipment.