Illinois medical supply company Medline Industries, Inc. will pay $91 million in restitution and fees for allegedly paying kickbacks to hospitals and healthcare providers. Whistleblower Sean Mason, a former Medline employee, filed suit against the company in October 2007. Mr. Mason accused Medline of violating the False Claims Act by paying bribes and kickbacks to hospitals and healthcare providers in an effort to get them to purchase Medline’s medical supplies.
The hospitals and healthcare providers used federal dollars from Medicaid and Medicare to pay for the Medline supplies under the pretense that they were in compliance with healthcare laws and anti-kickback laws. A major hurdle in the case was to specifically target Medline as the epicenter for bribery and kickbacks without naming the hospitals in the case, who allegedly submitted false claims to Medicaid and Medicare.
The $91 million settlement is one of the largest under the False Claims Act that did not involve the United States Department of Justice, who decided not to intervene in the case. Mr. Mason, for his role as a whistleblower in the successful case, will receive a reward of $23.4 million.