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Press Release

Shands Healthcare to Pay $26 Million to Resolve Allegations
Related to Inpatient Stays at Six Florida Hospitals

For Immediate Release
Office of Public Affairs

Shands Teaching Hospital & Clinics Inc., Shands Jacksonville Medical Center Inc. and Shands Jacksonville Healthcare Inc. (collectively, Shands Healthcare), which operates a network of health care providers in Florida, will pay the government and the state of Florida a total of $26 million to settle allegations that six of its health care facilities submitted false claims to Medicare, Medicaid and other federal health care programs for inpatient procedures that should have been billed as outpatient services, the Justice Department announced today.  The six Florida hospitals are:  Shands at Jacksonville; Shands at Gainesville, also known as Shands at the University of Florida; Shands Alachua General Hospital; Shands at Lakeshore; Shands Starke and Shands Live Oak.

“The Department of Justice is committed to ensuring that Medicare funds are expended appropriately, based on the medical needs of patients rather than the desire of health care providers to maximize profits,” said Stuart F. Delery, Assistant Attorney General for the Civil Division.  “Hospitals participating in Medicare must bill for their services accurately and honestly.”

Allegedly, from 2003 through 2008, the six hospitals knowingly submitted inpatient claims to Medicare, Medicaid and TRICARE for certain services and procedures that Shands Healthcare knew were correctly billable only as outpatient services or procedures. 

“The public expects its medical professionals to operate with a high degree of integrity,” said A. Lee Bentley III, Acting U.S. Attorney for the Middle District of Florida.  “When health care providers seek higher profits at the expense of their professional judgment, the public trust in the medical system is compromised.”

“Regardless of the complexity of these schemes to siphon off crucial health care dollars,” said Daniel R. Levinson, Inspector General of the U.S. Department of Health and Human Services, “our law enforcement officials will work tirelessly to seek justice.”


The six Florida hospitals were named as defendants in a qui tam, or whistleblower, lawsuit brought under the False Claims Act, which permits private citizens to sue on behalf of the government and receive a portion of the proceeds of any settlement or judgment awarded against a defendant.  The lawsuit was filed in federal district court in Jacksonville, Fla., by Terry Myers, the president of a healthcare consulting firm, YPRO Corp.  Of the $26 million settlement, $25,170,400 will go to Medicare and other federal health care payors.  The settlement also resolved allegations under the Florida False Claims Act; the state of Florida will receive $829,600.  Myers’ portion of these recoveries has yet to be determined.


This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $14.8 billion through False Claims Act cases, with more than $10.8 billion of that amount recovered in cases involving fraud against federal health care programs.


The settlement was the result of a coordinated effort among the U.S. Attorney’s Office for the Middle District of Florida, the Commercial Litigation Branch of the Justice Department’s Civil Division, the Department of Health and Human Services’ Office of Inspector General and Office of Counsel to the Inspector General, and the Florida Attorney General’s Office. 

The claims resolved by these settlements are allegations only, and there has been no determination of liability.   The lawsuit is captioned United States of America and the State of Florida ex rel. Terry L. Myers v. Shands Healthcare et al., Civil Action No. 3:08-cv-441-J-16HTS (M.D. Fla.).

Updated January 8, 2016

Press Release Number: 13-936