Dallas hospital settles kickback case for $7.5 million

by Ben Vernia | December 19th, 2017

On December 1, the Department of Justice announced that Dallas-based, physician-owned Pine Creek Medical Center had agreed to pay $7.5 million to resolve civil allegations, initially brought by a whistleblower, that the facility paid kickbacks to physicians for patient referrals. According to DOJ’s press release:

Pine Creek Medical Center LLC (“Pine Creek”), a physician-owned hospital serving the Dallas/Fort Worth area, has agreed to pay $7.5 million to resolve claims that it violated the False Claims Act by paying physicians kickbacks in the form of marketing services in exchange for surgical referrals, the Department of Justice announced today.

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The government alleged that, between 2009 and 2014, Pine Creek engaged in an illegal kickback scheme whereby the hospital would pay for marketing and/or advertising services on physicians’ behalf and, in return, the physicians would refer their patients, including Medicare and TRICARE beneficiaries, to Pine Creek.  Among other things, Pine Creek allegedly paid for advertisements on behalf of the physicians in a number of local and regional publications.  Pine Creek also allegedly paid for radio and television advertising, pay-per-click advertising campaigns, billboards, website upgrades, brochures, and business cards, as well as other forms of marketing to induce physicians to refer patients to Pine Creek for medical services.

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The government also announced that the two qui tam relators will receive $1,125,000 (a 15% relators’ share).

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