by bvernia | November 1st, 2009
The Department of Justice announced on October 30 that a McAllen, Texas-based hospital group settled FCA, Antikickback Statute, and Stark allegations raised in a qui tam for $27.5 million. According to the Department:
The settlement announced today involved allegations that the defendants had entered into financial relationships with several doctors in McAllen in order to induce them to refer patients to the defendants’ hospitals. The government alleged that these payments were disguised through a series of sham contracts, including medical directorships and lease agreements. Under the Stark Statute, Medicare providers are prohibited from billing Medicare for referrals from doctors with whom the providers have a financial relationship, unless that relationship falls within certain exceptions.
The case was originally brought by the relator, the hospital’s former director of managed care, against the hospital group and its parent. The hospital group, South Texas Health Systems, entered into a five-year Corporate Integrity Agreement as part of the settlement. The state of Texas received $2.3 million from the settlement.
