United States Of America, et al vs. Miraca Life Sciences, Inc.

Case Background

On September 13, 2020, Plaintiff United States of America, ex rel. Paul Dorsa, filed a retaliation lawsuit under the False Claims Act in the United States District Court, Tennessee Middle (Case number: 3:13cv1025). This case was assigned to Chief Judge William L. Campbell, Jr. and referred to Magistrate Judge Jeffery S. Frensley.

Cause

Relator Paul Dorsa filed a whistleblower retaliation case under the False Claims Act against Miraca Life Sciences, Inc. He alleged the company engaged in extensive Medicare fraud by violating the Stark Law and Anti-Kickback Statute. Miraca Life Sciences, a pathology laboratory services provider, offered illegal financial incentives to Medicare providers. These included free electronic medical record (EMR) systems to induce referrals for pathology services. The company calibrated these donations based on expected referrals, directly violating healthcare compliance regulations. Over several years, Miraca Life Sciences unlawfully submitted Medicare claims linked to these tainted referrals. This fraudulent practice resulted in millions of dollars in improper payments, constituting a systemic violation of the False Claims Act.

Injuries

Miraca Life Sciences’ fraudulent practices harmed Medicare’s integrity by incentivizing medically unnecessary referrals. These actions placed significant financial strain on the Medicare system, reducing funds for legitimate claims. The scheme also gave Miraca Life Sciences an unfair competitive edge over compliant healthcare providers, undermining fair competition. This retaliation case further highlighted the misuse of healthcare compliance measures to exploit Medicare resources.

Damages

Miraca Life Sciences generated over $250 million in revenue through fraudulent Medicare claims. These claims stemmed directly from illegal financial arrangements with physicians. The United States government suffered significant financial losses due to these false claims. Under the False Claims Act, the government pursued treble damages and civil penalties to recover these losses and prevent future violations of healthcare compliance.

Key Arguments and Proceedings

Legal representation

  • Plaintiff(s): United States of America, ex rel. | Paul Dorsa
    • Counsel for Plaintiff: Ellen Bowden McIntyre | James F. Sanders | James Isaac Sanders | Kendra E. Samson | Nathan C. Sanders | William T. Ramsey
  • Defendant(s): Miraca Life Sciences, Inc.
    • Counsel for Defendants: Briana T. Sprick Schuster | Danielle Bereznay | David Barmak | Jennifer R. Budoff | Karen Lovitch | Laurence Freedman | Matthew M. Curley | Natashia Tidwell

Claims

Relator alleged that Miraca Life Sciences knowingly submitted fraudulent Medicare claims, violating the False Claims Act. They offered EMR donations as unlawful kickbacks to secure physician referrals, breaching healthcare compliance regulations. The government sought damages for unjust enrichment and payments made by mistake, along with penalties under the False Claims Act.

Defense

Miraca Life Sciences denied the allegations and argued that the Plaintiff’s claims lacked merit. The Defendant asserted full compliance with healthcare regulations, including the Stark Law and Anti-Kickback Statute. They contended that their donations to physicians fell within safe harbor provisions and did not induce referrals. Miraca Life Sciences also denied submitting false claims under the False Claims Act and argued that Dorsa’s termination was unrelated to any whistleblowing activity. The company claimed the lawsuit was barred by laches, waiver, and unclean hands. They sought dismissal of the case, along with reimbursement of legal fees and costs.

Jury Verdict

On December 17, 2024, the jury found that Miraca Life Sciences retaliated against Paul Dorsa in violation of the False Claims Act. They awarded Dorsa $732,298 in back pay and $292,919 in compensatory damages, totaling $1,025,217. This verdict reflected the financial losses and emotional harm Dorsa suffered due to retaliation. The jury’s decision underscored the importance of protecting whistleblowers and holding companies accountable under the False Claims Act.

Court Documents:

Documents are available for purchase upon request at jurimatic@exlitem.com