New York city hospital firm pays $4 million for alleged Stark Law violations

by Ben Vernia | September 14th, 2017

On September 13, the Department of Justice announced that New York city-based MediSys Health Network, Inc., has agreed to settle a whistleblower’s suit alleging Stark Law violations for $4 million. According to DOJ’s press release:

MediSys Health Network Inc., which owns and operates Jamaica Hospital Medical Center and Flushing Hospital and Medical Center, two hospitals in Queens, New York, has agreed to pay $4 million to settle allegations that it violated the False Claims Act by engaging in improper financial relationships with referring physicians, the Justice Department announced today.

The settlement resolves allegations that the defendants submitted false claims to the Medicare program for services rendered to patients referred by physicians with whom the defendants had improper financial relationships. These relationships took the form of compensation and office lease arrangements that did not comply with the requirements of the Stark Law, which restricts the financial relationships that hospitals may have with doctors who refer patients to them.

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The lawsuit was filed by Dr. Satish Deshpande under the qui tam, or whistleblower, provisions of the False Claims Act. Under the Act, private citizens can bring suit on behalf of the United States and share in any recovery. Dr. Deshpande will receive $600,000 as his share of the recovery.

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The government announced that the whistleblower will receive $600,000 of the settlement (a 15% relator’s share).

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