Atlanta hospital and cardiologist pay approximately $500,000 to settle kickback allegations

by Ben Vernia | September 24th, 2014

On September 22, the U.S. Attorney’s Office for the Northern District of Georgia announced that a hospital in Atlanta and a cardiologist who a whistleblower alleged had been paid kickbacks had reached a settlement totaling nearly half a million dollars. According to the U.S. Attorney’s press release:

The United States Attorney’s Office announced it has reached settlements with Banks-Jackson-Commerce Hospital and Nursing Home Authority d/b/a Banks Jackson Commerce Medical Center (BJC) and Dr. Narasimhulu Neelagaru that total over $500,000.

“Kickbacks pervert our health care system, which is designed to insure that health care providers make decisions based solely on what is best for the patient,” said Sally Quillian Yates, United States Attorney for the Northern District of Georgia.

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The civil settlement resolves the United States’ investigation into BJC’s practices related to paying compensation to Dr. Neelagaru for professional services and medical director services that was in excess of fair market value. The alleged period for these improper payments and patient referrals was from 2000-2009. Because of the nature of these payments to Dr. Neelagaru by BJC, the United States claims that BJC received improper payments by the Medicare program for patients referred to BJC by Dr. Neelagaru.

This settlement also resolves a lawsuit filed by Ralph D. Williams under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens to bring civil actions on behalf of the United States and share in any recovery obtained.

The case, pending in the Northern District of Georgia, is filed under United States of America ex rel. Ralph D. Williams v. Banks-Jackson-Commerce Hospital and Nursing Home Authority d/b/a Banks Jackson Commerce Medical Center (“BJC”), Narasimhulu Neelagaru, M.D. and North Georgia Cardiology, PC, No. 1:08-cv-3235. Mr. Williams will receive a share of the settlement payment that resolves the qui tam suit that he filed. The claims settled in the civil settlement are allegations only, and there has been no determination of liability.

BJC reached its settlement with the United States in September 2010, but the case remained under seal pursuant to a Court order until the United States settled with Dr. Neelagaru. In connection with its settlement, BJC entered into a Corporate Integrity Agreement with the Department of Health and Human Services. That agreement imposes certain obligations on BJC to bolster its compliance program, including independent review of BJC’s financial arrangements with medical providers who refer patients to BJC.

BJC paid $329,000 to settle the case and Dr. Neelagaru has agreed to pay $200,000. The settlement resolves claims that BJC improperly billed the Medicare program for certain procedures and services rendered to patients in violation of the Physician Self-Referral Law, commonly known as the Stark Law, and in violation of the Anti-Kickback Statute.

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