Wheeling, West Virginia hospital pays $50 million to settle whistleblower’s Stark Act, kickback allegations

by Ben Vernia | September 9th, 2020

On September 9, the Department of Justice announced that Wheeling Hospital, in Wheeling, West Virginia, agreed to pay $50 million to settle civil allegations, originally brought by a whistleblower, that the hospital made volume-based referral payments to physicians, causing the submission of false claims. According to DOJ’s press release:

Wheeling Hospital Inc., an acute care hospital located in Wheeling, West Virginia, has agreed to pay the United States a total of $50,000,000 to resolve claims that it violated the False Claims Act by knowingly submitting claims to the Medicare program that resulted from violations of the Physician Self-Referral Law and the Anti‑Kickback Statute, the Justice Department announced today.

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 a financial relationship, unless that relationship satisfies one of the law’s statutory or regulatory exceptions.  The Anti‑Kickback Statute prohibits offering or paying remuneration to induce the referral of items or services covered by Medicare, Medicaid, and other federally funded programs.  Both the Stark Law and the Anti-Kickback Statute are intended to ensure that medical decision-making is not compromised by improper financial incentives and is instead based on the best interests of the patient.

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In this case, the United States alleged that, from 2007 to 2020, under the direction and control of its prior management, R&V Associates Ltd. and Ronald Violi, Wheeling Hospital systematically violated the Stark Law and Anti-Kickback Statute by knowingly and willfully paying improper compensation to referring physicians that was based on the volume or value of the physicians’ referrals or was above fair market value.

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The government also announced that the whistleblower (a former executive vice president of the hospital) will receive $10 million of the settlement (a 20% relator’s share).

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