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Newly unsealed case alleges kickbacks at Health First


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Health First logo.

More legal trouble for a Brevard County hospital this week.

Health First is already facing an antitrust case, and now a similar whistleblower lawsuit was unsealed this week as well.

Abe Aboraya, health reporter at WMFE, spoke with All Things Considered Host Crystal Chavez about the case.

Chavez: So what’s being alleged here?

Aboraya: The lawsuit alleges that Health First, which owns the hospital, a large physician group, and the dominant health insurance plan in Brevard County, spent years giving improper incentives to doctors for referring all their patients to Health First hospitals.

Court documents said doctors were allowed to buy ownership in surgery centers and outpatient practices in exchange for sending patients only to Health First and not their competitor.

Chavez: Now Abe Aboraya, these aren’t the only allegations that the whistleblower John Doe makes in the court documents.

Aboraya: That’s right. There are allegations that doctors who sent patients to Health First exclusively got a host of other benefits: They didn’t have to answer patient phone calls in the middle of the night, for example, and got free blood products. And Health First made some of these friendly doctors medical directors, the court documents said, paying them exorbitant stipends for little or no work.

And to be clear, I’m being polite here because of time: The list of allegations in this suit is more than what we’re talking about right now. It even gets into real estate.

Chavez: Now what does Health First say about all this?

Aboraya: In a statement, the hospital called the allegations frivolous and a distraction, and said the new allegations repeat old claims. They said multiple agencies, including the Florida Attorney General and the U.S. Federal Trade Commission, have reviewed and cleared the hospital’s practices. But they will cooperate fully with the legal process.

Chavez: And the idea is that it’s fraud when the government is billed for a medical procedure stemming from these relationships?

Aboraya: Exactly, and if true, we’re talking fraud to the tune of more than $100 million. And if the lawsuit is successful, the whistleblower who filed the complaint would get a cut of the settlement. So there’s a clear financial incentive on their part as well.

Chavez: So how do these kinds of arrangement, if ultimately found to be true, affect patients?

Aboraya: That’s the big worry. Sure, nobody wants to see government insurance, taxpayer dollars, funneled away in a scheme. But just as importantly, patients need to know that when they go to a doctor and he said go to this center for surgery or go here for cancer treatment, he’s making that decision because that’s where you’ll get the best care, and not where the doctor gets the most money.

Chavez: Abe, the allegations in the court documents: Are they all just about finances?

Aboraya: No, there are allegations of serious gaps in the quality of care at Health First hospitals. The court documents talk about a patient who died from an overdose of a cancer drug, and that death was not reported to the state. There were also, allegedly, two deaths in 2010 after heart surgery.

Chavez: What does this say about the state of health care overall?

Aboraya: I think this case in particular is being watched as a bellwether. In Obamacare, the law encourages greater cooperation between hospital and doctors and insurance companies. The idea is when everyone works together, you can save money and get better outcomes. But this case illustrates the possible downside of that: Too much power in one place.

The example is the separation of powers in the U.S. Constitution. The branch that writes the laws are separate from the branch that enforces the laws, which is separate from the branch that interprets the laws. In health care, Health First has all three branches under one roof: the insurance, the hospitals, and the doctors.

Chavez: And I take it this isn’t the only case against Health First.

Aboraya: No, the same group also has an anti-trust case going before the court as well, seeking to split up Health First. The next few months in Florida will be very interesting to watch and see how courts end up tackling this question


WMFE is a partner with Health News Florida, a statewide collaborative reporting on health care.

Health reporting on WMFE is supported in part by AdventHealth.

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Abe Aboraya

About Abe Aboraya

Health Reporter

Abe Aboraya started writing for newspapers in High School. After graduating from the University of Central Florida in 2007, he spent a year traveling and working as a freelance reporter for the Seattle Times and the Seattle Weekly, and working for local news websites in the San Francisco Bay area. Most recently Abe ... Read Full Bio »

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