Meridian Surgical Partners, a national operator of outpatient ambulatory surgery centers, announced on September 10 that it had settled a qui tam lawsuit brought by a former employee at one of its centers located in Florida. The case is especially relevant to anyone in the ASC industry as it touched on several issues faced by most joint ventured ASCs, including the sale of shares to physicians and redemptions of physicians. Among other claims, a key allegation in the case was that Meridian had sold shares to physicians at below fair market value in order to induce referrals from such physicians.
While denying any liability, Meridian agreed to pay the U.S. government $3.8 million plus $1.8 million in attorneys fees, a small fraction of the $100 million originally demanded by the plaintiff, Thomas Reed Simmons.
In a qui tam lawsuit (commonly referred to as a whistleblower suit) a plaintiff brings an action alleging misuse of government funds, in this case Medicare funds. The U.S. Department of Justice then reviews the merits of the allegations and decides whether to join the lawsuit. If the government declines to join the suit, as it did in the Meridian case, the plaintiff can still proceed. If there is a settlement, the proceeds are awarded to the government and the plaintiff then receives a percentage of those proceeds.