The Third Circuit Court of Appeals upheld the reinstatement of a whistleblower lawsuit against neurosurgeons at the University of Pittsburgh Medical Center (UPMC). The original lawsuit, which was filed in 2012, was later dismissed by US District Court for the Western District of Pennsylvania Judge Cathy Bissoon in 2018. In September 2019, the UPMC employees who filed the original lawsuit appealed the decision of the US District Court of the Western District of Pennsylvania to the Third Circuit Court of Appeals, which ruled that the case had merit and should proceed to trial.

The whistleblowers, Anna Mitina, J. William Bookwalter and Robert J. Sclabassi argued that beginning as early as 2006, UPMC neurosurgeons increased the number of spinal operations they performed, which in turn led to a significant increase in both patient referrals to UPMC hospitals and the salaries of UPMC neurosurgeons. This was a direct violation of both the Stark Act and False Claims Act, which act in concert to protect taxpayers against healthcare fraud and being taken advantage of by doctors.

In his opinion, Third Circuit Court of Appeals Judge Stephanos Bibas stated that federal regulation of healthcare via Medicare and Medicaid ultimately leads to temptation of fraud.

Fraud is a particular danger because doctors and hospitals can make lots of money for one another. When doctors refer patients to hospitals or services, the hospitals make money. There is nothing inherently wrong with that. But when hospitals pay their doctors based on the number or value of their referrals, doctors have incentives to refer  more. The potential for abuse is obvious and requires scrutiny

This case is likely to move to the discovery phase.