Cleveland Clinic settles False Claims Act allegations for $7M

The Cleveland Clinic Foundation has settled recent allegations it violated the False Claims Act by submitting federal grant applications and progress reports to the National Institutes of Health after failing to disclose an employee’s role in the research.

The Department of Justice (DoJ) announced on May 17 that the settlement resolves claims that the Cleveland Clinic Foundation made false statements to NIH on three federal grants when it allegedly failed to say the principal investigator on each grant had pending and/or active grants from foreign institutions. These institutions had provided financial assistance to support the investigator’s researcher and already obligated their research time, DoJ explained.

NIH requires organizations to provide full transparency in applications and throughout the grant’s lifecycle. This includes a requirement that grant applicants disclose all sources of research support no matter where it comes from. The information must be included in grant applications and follow-up documentation related to the NIH reward.

DoJ explained that NIH uses information on research support to determine if an application has the time to allocate to the proposed research and if there is any source of duplicate funding. The information also enables NIH to determine if an applicant’s financial interest may interfere with their objectivity during research.

Cleveland Clinic Foundation paid $7,600,000 to the federal government to settle the allegations, as well as accusations that it violated NIH password policies by allowing employees to share passwords. DoJ noted that some of the false statements provided to NIH in relation to the Cleveland Clinic Foundation’s three grants in question were made by some of the organization’s employees who were inappropriately given access to NIH’s online grant reporting platform.

Cleveland Clinic Foundation said it will impose Specific Award Conditions on all its grants for a year. The Specific Award Conditions, in this case, require a high-level employee to personally attest to the completeness and accuracy of all grant support information provided to NIH.

Additionally, the organization must also create a corrective action plan as part of the settlement. DoJ said in the announcement that the plan will include an assessment of internal controls when it comes to other grant support and foreign-component reporting, a mandatory training program for disclosing other grant support, research security, and cyber security. Cleveland Clinic Foundation must also develop an improvement plan for internal controls to ensure the organization has institutional oversight to confirm the information its principal investigators disclose to true, among other requirements for NIH grants.

The Specific Award Conditions will go into effect on Oct. 1, 2024, and go through Sept. 30, 2025, or until NIH declares Cleveland Clinic Foundation has completed its corrective action plan.

“Each year, NIH awards federal grants to support research to improve public health, but those funds are limited and the grant process is competitive. Every entity or person who seeks such grant money must strictly play by the rules. As stewards of taxpayer dollars, our Office takes seriously its responsibility of ensuring that grant recipients fully and accurately report all required information to NIH so that it may properly award its limited funds to deserving institutions,” U.S. Attorney Rebecca C. Lutzko for the Northern District of Ohio, said in the announcement. “Today’s settlement illustrates the importance of being truthful at every stage of the grants process.”