Detroit-area Beaumont Hospitals pays $84.5 million to settle Anti-Kickback, Stark allegations

by Ben Vernia | August 6th, 2018

On August 2, the Department of Justice announced that William Beaumont Hospital, based in the Detroit area, had agreed to settle civil False Claims Act allegations, originally brought by several whistleblowers in four suits, that the hospital system violated Medicare’s Anti-Kickback Statute and Stark Law by engaging in improper financial relationships with referring physicians. According to DOJ’s press release:

William Beaumont Hospital, a regional hospital system based in the Detroit, Michigan area, will pay $84.5 million to resolve allegations under the False Claims Act of improper relationships with eight referring physicians, resulting in the submission of false claims to the Medicare, Medicaid and TRICARE programs, the Justice Department announced today.

The Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid, and other federally funded programs.  The Physician Self-Referral Law, commonly known as the Stark Law, prohibits a hospital from billing Medicare for certain services referred by physicians with whom the hospital has an improper financial arrangement, including the payment of compensation that exceeds the fair market value of the services actually provided by the physician and the provision of free or below-market rent and office staff.  Both the Anti-Kickback Statute and the Stark Law are intended to ensure that physicians’ medical judgments are not compromised by improper financial incentives and instead are based on the best interests of their patients.

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In addition to the payment, Beaumont has accepted a five-year Corporate Integrity Agreement.

DOJ stated that the relators’ share of the settlement proceeds has not yet been determined.

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