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Air services firm, hospital system settle False Claims Act cases

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DOJ

An air services company and its subsidiary will pay $11.1 million to resolve False Claims Act charges in connection with aircraft maintenance, while the whistleblower who reported the alleged charges will receive $2.2 million, the U.S. Department of Justice said Tuesday.

Separately, last week an Akron, Ohio, hospital system agreed to pay $21.3 million to settle FCA charges.

Wood Dale, Illinois-based AAR Corp. and its subsidiary, Melbourne, Florida-based AAR Airlift Group Inc., agreed to pay the $11.1 million to resolve FCA allegations in connection with aircraft maintenance services performed by Airlift on two U.S. Transportation Command contracts.

The whistleblower, a former Airlift employee, will receive $2.2 million of the settlement, DOJ said in its statement Tuesday. 

The companies also agreed to pay $429,274 to resolve a separate Federal Aviation Administration matter citing deficiencies in Airlift’s helicopter maintenance, the statement said.

The allegations involved helicopters Airlift owned and maintained for use in transporting Department of Defense cargo and personnel in Afghanistan and Africa, the statement said.

The FCA settlement resolves allegations that Airlift knowingly failed to maintain nine aircraft in accord with contract requirements.

Brian M. Boynton, acting assistant attorney general for the DOJ’s civil division, said in a statement, “The knowing failure to comply with contractual obligations is unacceptable, particularly when such violations raise safety concerns.”

AAR did not respond to a request for comment.

In the other recent FCA settlement, Akron General Health System agreed to pay $21.3 million to resolve charges that it paid “substantially in excess of fair market value” to area physician groups to secure their patient referrals, the DOJ said Friday.

The department said in a statement that AGHS did so between August 2010 and March 2016, in violation of the Anti-Kickback Statute and the Physician Self-Referral Law. It then submitted claims for services provided to the patients in violation of the FCA.

The Cleveland Clinic acquired AGHS in 2016.

The settlement resolves whistleblower claims brought by Beverly Brouse, AGHS’ former director of internal audit,  and Ethical Solutions LLC, the DOJ said.

Bridget M. Brennan, acting U.S. attorney for the northern district of Ohio in Cleveland, said a statement, “Medical decisions should be made with a patient’s best interest in mind rather than an illegal financial agreement.”

The Cleveland Clinic said in a statement, “We are committed to compliance with health care laws and regulations throughout our organization, and every employee is responsible for following the standards of our code of conduct.

“In early 2016, shortly after Cleveland Clinic acquired Akron General, we identified a potential compliance concern related to Akron General’s contracts with a few of its independent physician groups.

“These contracts were in place before Cleveland Clinic acquired Akron General. We promptly reported the matter to the Department of Justice and fully cooperated with its review. Akron General and the Department of Justice have now reached a settlement.”