Medline Industries, Inc, an Illinois medical supply company, will pay $91 million to settle a whistleblower lawsuit accusing it of paying fraudulent kickbacks to hospitals and other health care providers that purchased medical equipment with federal funds. Medline will pay $85 million to the United States, which will then pay $23.4 million to the whistleblower, a former Medline employee. According to the settlement agreement, Medline will also pay $6 million in attorneys’ fees.
In his Complaint, the whistleblower contended that privately-held Medline offered the kickbacks to win new business. It was also alleged that by paying bribes and kickbacks, Medline caused the hospitals that took the bribes to submit false claims to Medicare and Medicaid. The Complaint further alleged that some of these kickbacks were falsely labeled as “rebates,” and others took the form of junkets, expensive gifts and charitable donations. This appears to be another example of how some corporate bosses believe cheating the government is acceptable behavior. There is no telling how much fraud of this sort goes undetected, costing U.S. taxpayers tremendous sums of money.