Mayo Clinic to pay $1 million in lawsuit settlement - KTTC Rochester, Austin, Mason City News, Weather and Sports

Mayo Clinic to pay $1 million in lawsuit settlement

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ROCHESTER, Minn. (KTTC) -- Mayo Clinic and three related entities agreed Thursday to pay $1.26 million to settle a federal lawsuit that alleged false claims for payment to the government.

The lawsuit alleged that the claims for payment included surgical pathology services Mayo did not provide. The suit was brought in 2007 under the "whistleblower" provisions of the False Claims Act. Dr. David Ketroser, the lead whistleblower in this case, is a physician and an attorney. The suit focused on Mayo's billing practices at its pathology labs in Rochester.

Mayo allegedly billed Medicare, Medicaid and other federal health care programs for the preparation and examination of permanent human tissues slides Mayo never made or examined.

"Billing government health programs for services never rendered—as Mayo allegedly did—is totally unacceptable," said Lamont Pugh, III, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General for the Chicago Region, which includes Minnesota.

Mayo Clinic spokesman, Karl Oestreich, issued the following statement:

"Upon discovering a billing error in 2007, Mayo promptly corrected it and voluntarily refunded $262,975 to the government. We worked with outside accounting experts to ensure this figure represented the complete and appropriate reimbursement amount. The error was identified and corrected long before Mayo became aware that a sealed complaint had been filed and before Mayo was notified that the DOJ was evaluating whether to become involved in the complaint."

The settlement announced Thursday reflects the $262,975, and Mayo agreed to pay an additional $1 million.

The payment is required within seven business days and, once received, the federal government will pay $229,822 to whistleblowers who participated in the action. Mayo will also pay their attorney fees and legal expenses.

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