Whistleblower accuses Bismarck’s Mid Dakota Clinic of kickback schemes

Local News

FARGO, N.D. (AP) — The former CEO of a North Dakota clinic filed a whistleblower lawsuit accusing the facility of participating in kickback schemes that cost the federal government millions of dollars in fraudulent Medicare and Medicaid claims.

Jeffrey Neuberger alleges in his lawsuit that doctors from Bismarck’s Mid Dakota Clinic, P.C. and its building partnership boosted their salaries by referring patients to the clinic’s ambulatory surgical center, because they all shared in the profits of that center.

The document says Mid Dakota Clinic had a similar kickback arrangement with another physician group in Bismarck.

Neuberger “repeatedly heard and observed MDC surgeons routinely discussing the fact that they received referrals from their primary care or non-surgical physician shareholders at MDC,” the complaint says.

“The scheme is straightforward,” it reads, and the government would not have paid the claims had it known about the kickbacks. The doctors “knew full well” that every referral would raise their salaries, which were above the national averages, the complaint says.

The complaint also accuses the clinic’s board of directors of denying three doctors the chance to invest in the company unless they produced more business, which they did in part by referrals to Mid Dakota Clinic doctors and procedures in the surgical center.

Neuberger, who ran the company from April 2007 until January 2013, filed the suit in January 2017 and it was unsealed last month.

Mid Dakota Clinic has not filed a response, and lawyers for Neuberger and Mid Dakota Clinic did not immediately respond to phone messages.

Federal anti-kickback laws are intended to prevent abuses that occur when a person profits from a patient referral, or by ordering unnecessary procedures. There is no indication in the suit that patients were referred for treatment they didn’t need.

Mid Dakota Clinic began trying to sell the business in 2013. The suit says Catholic Health Initiatives, a large hospital chain that owns St. Alexius hospital in Bismarck, showed interest but told Mid Dakota it was worried that the clinic’s ownership structure allowed for kickbacks.

The suit asks for a civil penalty of $11,000 for each violation of the federal False Claims Act alleged to have happened before Nov. 2, 2015, and a $21,563 fine for each violation after that date. That includes every allegedly illegally submitted invoice.

In a separate document, the government declined its opportunity to intervene in the complaint, saying Neuberger and Mid Dakota Clinic are “far along in settlement negotiations.”

A status hearing by telephone is scheduled for Oct. 30.

Copyright 2019 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Recent Videos

Synchronized Skating

Thumbnail for the video titled "Synchronized Skating"

Dickinson State Football

Thumbnail for the video titled "Dickinson State Football"

Top Plays

Thumbnail for the video titled "Top Plays"

ND Outdoors 11-17

Thumbnail for the video titled "ND Outdoors 11-17"

Suspect Loose

Thumbnail for the video titled "Suspect Loose"

Unattended Cars

Thumbnail for the video titled "Unattended Cars"

Recycling

Thumbnail for the video titled "Recycling"

Berthold Holiday Drive

Thumbnail for the video titled "Berthold Holiday Drive"

Robert's One Minute Forecast 11-17

Thumbnail for the video titled "Robert's One Minute Forecast 11-17"

Baby Event

Thumbnail for the video titled "Baby Event"

Hospice Tree Lighting

Thumbnail for the video titled "Hospice Tree Lighting"

Ryan Fans

Thumbnail for the video titled "Ryan Fans"

College Football

Thumbnail for the video titled "College Football"

WDA Volleyball

Thumbnail for the video titled "WDA Volleyball"

Girl's State Swimming

Thumbnail for the video titled "Girl's State Swimming"

Holiday Cooking

Thumbnail for the video titled "Holiday Cooking"

Winter Pet Safety

Thumbnail for the video titled "Winter Pet Safety"

Harvey Driver's Office

Thumbnail for the video titled "Harvey Driver's Office"

Heart Transplant

Thumbnail for the video titled "Heart Transplant"
More Video

KX News Trending Stories

Don't Miss

Daily Pledge

More Daily Pledge