Two names in Mid-South healthcare named in alleged fraud lawsuit

Two names in Mid-South healthcare named in alleged fraud lawsuit

MEMPHIS, Tenn. (WMC) - If you’ve been a patient at West Clinic in recent years you might have been referred for outpatient treatment within the Methodist Healthcare system.

According to a lawsuit, that wasn’t by chance. It was all a part of an alleged backdoor deal to make more than a billion dollars in profits.

Two whistleblowers, both former senior executives within the Methodist Healthcare system, filed this lawsuit. It was made public in December of last year.

The lawsuit alleges the former CEO of Methodist Le Bonheur Healthcare, Gary Shorb fashioned a deal with the West Cancer Center to drive patients to Methodist facilities.

The lawsuit claims West Clinic physicians would only refer their patients to Methodist hospitals, and in return, those physicians would get kickbacks.

The lawsuit alleges from 2012 to 2018, Methodist paid West Clinic physicians 400 million dollars, and in return, Methodist Le Bonheur Healthcare would profit from those referrals in hospital admissions, drugs, radiation therapies, and outpatient procedures.

The plaintiffs say Methodist violated federal anti-kickback laws by sharing drug profits obtained through the 340-B Drug Discount program.

According to the lawsuit, “The Methodist system has become one of the wealthiest ‘non-profit’ and tax-exempt hospital systems in the United States.”

Due to the partnership with West Cancer Center, the lawsuit says the hospital saw a 1.5 billion dollar increase in revenues.

A spokesperson for Methodist Le Bonheur Healthcare says the lawsuit lacks merit and says quote “Methodist Le Bonheur Healthcare upholds the highest standards and complies with all legal and regulatory requirements. Our professional agreements with the West Clinic and its physicians provided needed medical services for cancer patients. Our payments for the services provided were appropriate.”

WMC Action News 5′s Kelli Cook reached out to the plaintiff’s lead counsel for a comment and he said he had no comment at this time.

We also reached out to the law firm representing the defendants, and we have not heard back.

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