Following self-disclosure, Ohio hospital pays $8.5 million to settle allegations of Stark Law violations

by Ben Vernia | March 14th, 2014

On March 13, the Department of Justice announced that Fremont, Ohio’s Memorial Hospital, has agreed to pay $8.5 million to resolve claims that the hospital itself disclosed that it violated the Stark Law’s prohibition on physician self-referrals, and thereby violated the False Claims Act. According to DOJ’s press release:

Memorial Hospital (Memorial), an Ohio nonprofit corporation that operates an acute care hospital in Fremont, Ohio, has agreed to pay $8.5 million to settle claims that it violated the False Claims Act, the Anti-Kickback Statute and the Stark Statute by engaging in improper financial relationships with referring physicians, the Justice Department announced today.

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The Anti-Kickback Statute and the Stark Statute restrict the financial relationships that hospitals may have with doctors who refer patients to them. The settlement announced today involved allegations that financial relationships that Memorial had with two physicians – a joint venture between Memorial and a pain management physician and an arrangement under which an ophthalmologist purchased intraocular lenses and then resold them to Memorial at inflated prices – violated statutory requirements. These issues were disclosed to the government by Memorial.

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