Lawsuit: IU Health, HealthNet defrauded feds, endangered patients

April 17, 2015

A federal whistleblower lawsuit charges that IU Health and HealthNet Inc. put low-income pregnant women and their newborn babies at risk in a fraud scheme to increase revenues and bilk taxpayers out of millions of dollars.

The suit, brought by Dr. Judith Robinson and recently unsealed, claims that the two health care providers left their pregnant patients' care to lower-cost nurse midwives instead of having them treated by doctors. But when billing Medicaid, the two claimed the services were provided by doctors, Robinson’s complaint alleges.

“The patients paid a price too: newborn babies with permanent neurological injuries, emergency caesarian sections, and even instances of maternal and fetal death,” the suit says.

Robinson formerly served as director of women’s services at HealthNet, as well as medical director of ob-gyn services at IU Health.

When Robinson learned of three instances of babies with permanent neurological injuries within a six-month period, allegedly due to the subpar care, she alerted IU Health executives as early as February 2013, according to her suit.

Four months later, she was fired.

“Once Dr. Robinson was pushed out of the way, HealthNet and IU Health have continued their practices—and the damages they cause to the U.S., Indiana, and high-risk mothers and their babies,” the complaint says.

HealthNet is the largest provider of midwifery services in the state. MDWise Inc., a Medicaid claims processor, also is named in the suit.

Robinson filed her suit in December 2013 and amended the complaint in October 2014. Per the court’s order, both remained sealed from public view until March 10 of this year.

The suit claims that the three violated the federal false claims act by submitting claims for treatment of high-risk patients by non-physicians and for accepting kickbacks, among other charges.

"In keeping with our corporate policy and out of respect for those involved, IU Health does not comment on matters involving active litigation," IU Health said Friday in an e-mail to IBJ. "We will fully cooperate with any requests throughout the investigation."

The U.S. Attorney's Office for the Southern District of Indiana also said it had no comment on pending litigation


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