Adventist Health System pays $115 million to settle whistleblowers’ suits

by Ben Vernia | October 15th, 2015

On September 21, the Department of Justice announced that Adventist Health Systems had agreed to pay $115 million to settle civil allegations – originally brought in two separate whistleblower suits, that the company paid unlawful volume-based bonuses to physicians, and submitted miscoded claims for reimbursement. According to DOJ’s press release:

Adventist Health System has agreed to pay the United States $115 million to settle allegations that it violated the False Claims Act by maintaining improper compensation arrangements with referring physicians and by miscoding claims, the Justice Department announced today.  Adventist is a non-profit healthcare organization that operates hospitals and other health care facilities in 10 states.

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

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The settlement also resolves allegations that Adventist submitted bills to Medicare for its employed physicians’ professional services containing certain improper coding modifiers, and thereby obtained greater reimbursement for these services than entitled.

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The whistleblowers in the two cases worked at the Adventist corporate headquarters, and at a hospital in North Carolina. DOJ did not announce the amount they will receive from the settlement.

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