Dive Brief:
- Waste management company Stericycle Inc. has agreed to pay $26,750,000 to settle a 2008 complaint that it has been systematically overcharging government entities.
- A former Stericycle employee brought the qui tam complaint on behalf of the federal government and eventually 14 states and the District of Columbia. "A qui tam action is a whistleblower lawsuit filed by a private citizen against an entity believed to have violated a contract with the government," Nasdaq writes. The suit alleges that beginning in 2003, Stericyle programmed its billing system to increase rates by 18% every nine months, violating the terms of its federal contract and for the purpose of evading detection and increasing its revenues.
- The lawsuit claims that Stericycle's upper management was aware of and complicit in the illegal scheme. Stericycle did not admit to fault or wrongdoing in the settlement, refutes all allegations and said it agreed to the settlement to avoid continued litigation.
Dive Insight:
Lake Forest, IL-based Stericycle provides disposal services for medical and biohazardous waste, serving hospitals, laboratories, physician practices, and dental clinics, among others.
The whistleblower lawsuit came to light in 2013 when New York Attorney General Eric Schneiderman announced a $2.4 million settlement between the state and Stericycle as compensation for overcharging schools, hospitals and police and fire departments for waste management services. The state then placed strict guidelines on the company for future rate hikes.
The settlement gives Stericycle a clean slate and relief for the affected entities.
