Report on Research Compliance 21, no. 2 (February, 2024)
Moffitt Cancer Center’s recent $19.5 million settlement with the U.S. Department of Justice (DOJ) and the state of Florida resolving allegations that billing errors violated the False Claims Act (FCA) triggered a “fully redesigned” billing program but “did not affect the finances” of the Tampa, Fla., institution, Moffitt officials told RRC.
But, the cancer center was otherwise unwilling to answer questions or share experiences that might benefit others, even while acknowledging in a statement to RRC that clinical trial billing rules are “complex.” Moffitt’s settlement joins the fairly rare group of research universities and other institutions that have faced government enforcement action related to billing issues of this type. More commonly, FCA and other grant fraud cases have centered on misspending, effort reporting errors, research misconduct and undisclosed foreign or other support. Like Moffitt’s new settlement, some involve self-disclosure, but others result from whistleblower complaints.
DOJ’s Jan. 4 announcement included the 15-page settlement itself, although more than half of the pages contain boilerplate legal language and not many specifics about the case—which was concluded through a “coordinated effort between the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, the U.S. Attorney’s Office for the Middle District of Florida” and the HHS Office of Inspector General, the government said.[1]
The full settlement amount is $19,564,743. Of this total, $13,043,162 is restitution and $6,521,581 is a penalty—50% of the restitution amount. Under the FCA, DOJ can impose penalties up to triple the government’s loss.
At issue were “improper claims submitted to federal healthcare programs for certain patient care items and services provided during research studies that were not eligible for reimbursement,” DOJ said. The government “acknowledged that Moffitt took a number of significant steps entitling it to credit for cooperating with the government.”
Moffit disclosed the unallowable billing and/or reimbursement issues to DOJ on Dec. 11, 2020, according to the settlement, and made subsequent disclosures following its investigation. The unallowable claims were submitted for a six-year period, from May 11, 2014, to May 10, 2020, to Medicare, Medicaid, TRICARE and the Federal Employees Health Benefits Program, according to the settlement.[2] These claims violated National Coverage Determination 310.1, which specifies routine costs in clinical trials, the government said.
Penalties Were Far Less Than Possible
No information was provided as to the amount each program was overcharged. However, through its shared oversight of Medicaid, Florida was to receive $1,320,500 of the total settlement amount, of which $880,333 is restitution and $440,166 is a penalty (equal to 50% of the unallowable charges, the same as for the federal government).
The specific items or services the cancer center billed for but shouldn’t have is also unclear. Moffitt inappropriately charged the state and federal programs for items and services “provided as part of clinical trial research that should have been billed to trial sponsors or, customarily, should have been provided free-of-charge for beneficiaries enrolled in clinical trials,” according to the settlement.
RRC sought to learn from Moffitt how it first discovered there were unallowable charges and what led to the mistakes, how Moffit conducted its investigation, how widespread the billing errors were among its research portfolio and whether the issues were confined to certain procedures, researchers or types of studies.
Moffitt also would not address whether any cancer center personnel faced sanctions for the unallowable charges nor provide details on the changes it made in the wake of the disclosure and settlement.
DOJ: Moffitt ‘Hired Significant Additional Staff’
The settlement states that Moffitt “took significant steps to remediate the issues with its billing systems and practices, including (1) establishing a new unit within its finance department responsible for ensuring compliant billing of services provided in clinical trials; (2) updating its policies and procedures relating to the billing of services provided in clinical trials; (3) hiring significant additional staff to implement these new policies and procedures; and (4) placing a blanket hold on all charges associated with clinical trials until it could ensure that the new policies and procedures were working effectively.”
In consideration of these efforts, the government agreed it would not seek to exclude Moffitt from participation in Medicare, Medicaid and other federal programs—bans it has the authority to impose under the FCA and the Civil Monetary Penalties Law. Federal and state officials involved in the settlement did not respond to RRC’s request for comment.
The following is Moffitt’s full statement to RRC:
“Moffitt Cancer Center discovered several years ago it had incorrectly billed Medicare and other federal health care programs for costs associated with clinical research. We quickly worked with the federal government to ensure substantial remedial measures were taken to avoid this from happening moving forward. Federal government billing standards driving what can be billed to federal programs (such as Medicare) are highly complex, and compliance with these billing standards requires continuous and concerted vigilance. Moffitt has fully redesigned its clinical research billing compliance programs to ensure adherence with all applicable federal government billing standards. Clinical research programs are a critical part of advancing cancer care. Moffitt’s clinical research programs continue to be safe and effective, and this did not affect the finances or quality of care provided to patients at Moffitt.”
The settlement comes several years after Moffitt faced a scandal related to unreported foreign research support, which led to the resignation of its CEO and five other researchers. Moffitt also returned $1 million to the state of Florida due to questions about how the funds were spent.
Rush, Emory, Columbia Cases Were Similar
As noted earlier, Moffitt’s is not the first settlement to specifically involve improper billing issues for clinical trial participants—that distinction belongs to Rush University, which self-disclosed overbilling Medicare related to oncology trials in 2003. It paid $1 million in 2005 and implemented a three-year oversight plan that required periodic reporting to the government.
In 2013, Emory University agreed to pay $1.5 million to resolve allegations similar to Moffitt’s self-disclosures, which were brought to light by employee Elizabeth Elliot via a qui tam or whistleblower suit. The government alleged that Emory “billed Medicare and Medicaid for services the clinical trial sponsor agreed to pay (and, in some cases, actually did pay, thereby resulting in Emory’s being paid twice for the same service).”[3]
At the time, RRC reported that the suit actually arose due to a feud between hospitals in the Emory system, with one contending it was being underpaid for studies. A study Emory officials conducted as a result revealed that research subjects were being coded as “regular patients,” which meant sponsors and insurers (including federal programs) were being charged for “sponsor-paid procedures.”[4]
Emory took no action to address the problems, according to Elliot, a clinical research finance manager in its Office of Clinical Research from September 2008 to November 2009. Elliot made her concerns known but was terminated as a result, according to her suit. She received $322,500 for attorneys’ fees and other costs and $11,250 for the termination. The state of Georgia shared $70,000 of the $1.5 million.
In 2016, Columbia University found itself in trouble related to how it claimed costs for the site of research, facing a suit also brought by a whistleblower. It agreed to pay the government $9.5 million. Columbia also said it “acknowledges and accepts responsibility” for charging a higher on-campus indirect cost (also called facilities and administrative, or F&A) rate on more than 400 NIH grants for psychiatry and neuroscience research.[5] The studies were actually performed rent-free in state-owned facilities.
Columbia officials disagreed with the government’s allegations and said they had received legal advice that their billing strategy was correct.
1 U.S. Department of Justice, Office of Public Affairs, “Florida Research Hospital Agrees to Pay More than $19.5 Million to Resolve Liability Relating to Self-Disclosure of Improper Billing for Clinical Trial Costs,” news release, January 4, 2023, https://bit.ly/3H5VXNA.
2 U.S. Department of Justice, “Settlement agreement, Moffitt Cancer Center,” https://bit.ly/3SpuE7B.
3 U.S. Department of Justice, U.S. Attorney’s Office for the Northern District of Georga, “Emory University To Pay $1.5 Million To Settle False Claims Act Investigation,” news release, August 28, 2013, https://bit.ly/3Sncx1P.
4 Theresa Defino, “Emory Pays $1.5M to Settle False Claims Suit, Cites ‘Challenges’ of Billing for Trials,” Report on Research Compliance 10, no. 10 (October 2013), https://bit.ly/427VVyl.
5 Theresa Defino, “In Columbia’s 2nd False Claims Case Since 2014, Site of Research Was Key,” Report on Research Compliance 13, no. 8 (August 2016), https://bit.ly/426Aldv.
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