A Florida-based health services contractor has settled a federal whistleblower lawsuit that alleged the company double-charged the U.S. government for medical examinations of IRS criminal investigators.
Comprehensive Health Services Inc. contracted with the IRS in 2009 to examine and evaluate agents’ medical qualifications through electrocardiograms, vision tests and in some cases full physicals. Though tests were billed as part of a bundled fee, the lawsuit alleged the company between 2009 and 2014 billed them separately as well and charged for full physicals for all employees, not just those who it was determined needed one.
James J. Kerr Jr., the whistleblower in the False Claims Act case, will receive approximately $645,000 of the $3.8 million settlement, according to an announcement Wednesday from the Maryland U.S. attorney’s office. Kerr was represented by Baltimore attorneys Steven H. Levin and Sarah F. Lacey of Levin & Curlett LLC.
“He is very pleased with the result, he’s pleased to have this completely behind him now and looks forward to the future,” Levin said.
Kerr was an employee of the company who retained Levin’s firm to file a qui tam action in 2014. Although Comprehensive Health Services is based in Florida, jurisdiction existed in Maryland, Levin said, because payments came through the state and Kerr wanted to work with Rosenstein’s office because he knew the prosecutors would be aggressive.
“On behalf of our client, we thank United States Attorney Rod Rosenstein and Assistant United States Attorney Tarra DeShields for their energetic commitment to ensuring that justice was served,” Levin said. “This is a victory for both the government and Mr. Kerr who sought to ensure that taxpayer money was not wasted.”
The settlement, which was reached last month, is not an admission of liability by the company, according to the settlement agreement. The case file is sealed.
Gary Palmer, CEO of Comprehensive Health Services, said in a prepared statement that the company cooperated fully with investigators after learning of the allegations.
“Our own review identified an accidental overbilling issue stemming from a mistake made when the IRS contract was originally set up in 2009,” Palmer said. “We confirmed that no other contracts were impacted.”
Palmer also said the company has “taken significant steps” to improve processes to ensure there are no further issues.
Rosenstein said in a statement Wednesday that businesses overcharging the government should be held accountable and called whistleblower lawsuits an “invaluable tool to deter fraud and punish perpetrators.”
This story was updated to include a statement from the Comprehensive Health Services Inc. CEO.
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United States ex rel. James J. Kerr, Jr. v. Comprehensive Health Services, Inc.
Court: U.S. District Court
Case No.: 1:14-cv-01769
Judge: Richard D. Bennett
Outcome: Settlement for United States of $3.818 million; $645,391 to James J. Kerr Jr.
Event: February 2009 to April 2014
Suit filed: June 2, 2014
Settlement: Jan. 27, 2017
Plaintiffs’ attorneys: Tarra DeShields, assistant U.S. attorney; Steven H. Levin and Sarah F. Lacey of Levin & Curlett LLC in Baltimore on behalf of relator James J. Kerr Jr.
Defendant’s attorneys: Lynne Halbrooks and John Brownlee of Holland & Knight LLP in Washington, D.C.
Count: Qui tam action, False Claims Act