UMass Memorial Healthcare Fraud Whistleblower Lawsuit Results in Settlement, Announces Sheller, P.C. Law Firm

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Whistleblower suit alleged hospital system charged the Commonwealth of Massachusetts for medical bills incurred by patients unable to pay by falsifying their addresses as “homeless shelter” residents

Sheller, P.C. Law Firm: Representing whistleblowers and patients injured by defective drugs and medical devices individually and in class action nationwide
Our client chronicled the alleged brazen back-office collections system at UMass that wrongly billed the Health Safety Net program for uninsured patients

UMass Memorial Health Care, Inc. and UMass Memorial Medical Center, Inc. (“UMass”) have agreed to return more than $50,000 to Massachusetts’ Health Safety Net to settle a whistleblower lawsuit alleging the Worcester-based hospital submitted fraudulent emergency room bills to the public health program. UMass also agreed to comply with certain regulations and guidances, in accord with the settlement agreement, which was unsealed this week by a federal judge.

A whistleblower’s sharp memory and attention to detail brought fraudulent healthcare reimbursement claims to light when the financial analyst noticed that the UMass Memorial Medical Center listed an uninsured patient’s address as a state resident in a homeless shelter instead of a Canadian with a legitimate address, details the complaint in the case.

The individual mandate for universal healthcare in Massachusetts created the Health Safety Net program in 2006 to reimburse hospitals and doctors for the debt of uninsured, “self pay” patients unable to meet their financial obligations for treatment due to low income, ineligibility for Medicaid, or other criteria.

“Our client chronicled the alleged brazen back-office collections system at UMass that was a drain on the Health Safety Net program,” said Matthew Monroe, an attorney at Sheller, P.C., referring to court documents. “He stepped forward and, we believe, put an end to the conduct.”

According to court documents, whistleblower Nelson Castro was an accounts receivable collections analyst who noticed an emergency room visit bill had been reimbursed by the state insurance program due to being characterized as a “bad debt” for someone living in a homeless shelter in Worcester, Massachusetts. The person was in fact a Canadian citizen who had offered to pay his bill. The alleged fraudulent representation of the patient and his ability to pay was brought by Castro to Sheller, P.C. and the law firm filed a qui tam lawsuit in Boston, Massachusetts in March 2012.

As reported in the Boston Globe on August 22, 2013, Sheller attorney Brian J. McCormick, Jr. said “I’m confident in the Attorney General’s investigation, and we’re pleased — we believe the conduct has been stopped.”

Healthcare billing fraud is on the rise, as reported by a Pew Research report released in March 2013. More than $19 billion in improper payments from Medicaid alone were reported for 2012, up from $11 billion in 2011, not including the various state and other government reimbursement programs affected. Healthcare fraud can include willful, deliberate acts including billing for services not provided, inflated charges, costs for supplies, unnecessary treatment, repeat billing, fabricated or enhanced patient diagnosis, kickbacks, and “upcoding” the level of treatment actually delivered.

About Sheller, P.C.:

Representing whistleblowers in over $5 billion in settlements on behalf of the U.S. government and taxpayers, the attorneys of Sheller, P.C. continue to collaborate with federal and state governments across the United States to expose fraud and abuse.

In practice since 1977, Philadelphia-based Sheller, P.C. also represents plaintiffs nationwide injured by drugs, medical devices and consumer products with over $100 million in confidential settlements in 2013 to date. Visit

Links and Resources:

U.S. and Commonwealth of Massachusetts ex rel. Nelson Castro v. UMass Memorial Health Care, Inc. and UMass Memorial Medical Center, Inc., Civil Action No. 12-11750

Chapter 58, Massachusetts Acts of 2006 “An Act Providing Access to Affordable, Quality, Accountable Health Care”

Medicaid Anti-Fraud and Abuse Practices, Pew Charitable Trusts Research Report, March 6, 2013

UMass Memorial Medical Center settles fraud charges, The Boston Globe, August 22, 2013

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Matthew M. Monroe, Esq.

Brian J. McCormick, Jr., Esq.
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