Florida Hospital Settles $85M Whistleblower Lawsuit for Illegally Incentivizing Physician Referrals of Medicare Patients

Halifax Hospital Medical Center and Halifax Staffing Inc. recently entered into an $85 million settlement with the federal government to resolve the False Claims Act lawsuit of United States v. Halifax Hosp. Med. Ctr., 6:09-CV-1002-ORL-31T (M.D. Fla. 2014). The whistleblower-initiated False Claims Act suit alleged the following:

[The hospital system] violated the False Claims Act by submitting claims to the Medicare program that violated the Physician Self-Referral Law, commonly known as the Stark Law, the Justice Department announced today. The Stark Law forbids a hospital from billing Medicare for certain services referred by physicians who have a financial relationship with the hospital.  In this case, the government alleged that Halifax knowingly violated the Stark Law by executing contracts with six medical oncologists that provided an incentive bonus that improperly included the value of prescription drugs and tests that the oncologists ordered and Halifax billed to Medicare.  The government also alleged that Halifax knowingly violated the Stark Law by paying three neurosurgeons more than the fair market value of their work. “Financial arrangements that compensate physicians for referrals encourage physicians to make decisions based on financial gain rather than patient needs,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery.  “The Department of Justice is committed to preventing illegal financial relationships that undermine the integrity of our public health programs.” ... “Patients deserve to know that recommendations are based on sound medical practice, not illegal financial relationships between providers,” said Inspector General for the U.S. Department of Health and Human Services Daniel R. Levinson.

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