Johns Hopkins and DC hospital settle self-referral allegations for $5 million

by Ben Vernia | April 17th, 2023

On April 17, the Department of Justice announced that Johns Hopkins Health System, and its subsidiary Sibley Hospital in northwest Washington, D.C., have agreed to pay $5 million to settle civil claims that the companies violated the Stark Law’s prohibition against physician self-referrals. According to DOJ’s press release:

Sibley Hospital (Sibley) and its parent company, Johns Hopkins Health System (Johns Hopkins), have agreed to pay the United States $5 million to resolve allegations arising from claims that Sibley submitted to the Medicare Program, 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. It is intended to ensure that medical decision-making is not influenced by improper financial incentives and instead is based on the best interests of the patient.

Today’s settlement resolves allegations that, from 2008 through 2011, Sibley violated the Stark Law by billing Medicare for services referred by ten cardiologists to whom Sibley was paying compensation that exceeded the fair market value of the services provided. These allegations arose out of conduct that Sibley and Johns Hopkins self-disclosed to the United States.

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The case apparently arose from a government investigation, and not from a whistleblower’s lawsuit.

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