DOJ settles whistleblower case with Missouri hospital for $5.5 million

by Ben Vernia | August 17th, 2015

On August 13, the Department of Justice announced that two St. Louis-based health care providers, including a local hospital, had agreed to pay $5.5 million to resolve civil allegations that the providers engaged in prohibited financial arrangements. According to DOJ’s press release:

Two Southwest Missouri health care providers have agreed to pay the United States $5.5 million to settle allegations that they violated the False Claims Act by engaging in improper financial relationships with referring physicians, the Justice Department announced today.  The two providers are Mercy Health Springfield Communities, formerly known as St. John’s Health System Inc., which owns and operates a hospital in Springfield, Missouri, and its affiliate, Mercy Clinic Springfield Communities, formerly known as St. John’s Clinic, which operates health care facilities in southwest Missouri.

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The settlement announced today resolved allegations that the defendants submitted false claims to the Medicare program for services rendered to patients referred by physicians who received bonuses based on a formula that improperly took into account the value of the physicians’ referrals of patients to the clinic.  Federal law restricts the financial relationships that hospitals and clinics may have with doctors who refer patients to them.

The government announced that the whistleblower – a physician employed by one of the providers – will receive $825,000 of the settlement (a minimum 15% relator’s share).

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