On February 1, 2016, the allocation of a $28.5 million qui tam False Claims Act settlement involving Stericycle Inc, a medical waste disposal company, was approved. Stericycle previously agreed, in October 2015, to pay $26,750,000 to settle claims that the company illegally imposed price increases on its government customers.  The recent approval finalized the disbursement of the settlement among the qui tam relator, the United States, 14 states and Washington D.C.   The relator, a former government customer-relations specialist for Stericycle, will receive nearly  $5.7 million as her portion of the recovery and the relator’s counsel will receive $1,750,000 for attorney’s fees and costs as provided under the False Claims Act.

The case was originally filed in 2008 and alleged that Stericycle was illegally imposing 18% price increases, annually and even more frequently on federal and state government customers with long-term fixed price contracts that either did not permit price increases or permitted price increases only to address increases in the company’s costs. It was also alleged that the price increases bore no relation to the company’s costs.  The total amount of overcharges, between 2004 and 2008, were determined to be $11.76 million.  However, the total settlement amount of $28.5 million demonstrates the significance of the False Claims Act’s treble damages and attorney’s fees provisions.

To report healthcare fraud, please contact Frohsin & Barger.