May 19, 2017

DOJ Catch of the Week — Mercy Hospital

By the C|C Whistleblower Lawyer Team

This week’s Department of Justice “Catch of the Week” goes to two Southwest Missouri hospitals who yesterday agreed to pay $34 million to settle charges they violated the False Claims Act by engaging in improper financial relationships with referring physicians.  The two hospitals are Mercy Hospital Springfield and its affiliate Mercy Clinic Springfield Communities (formerly known respectively as St. John’s Regional Health Center and St. John’s Clinic). See DOJ Press Release.

According to the government, the hospitals submitted false claims to Medicare for chemotherapy services to patients referred by oncologists whose compensation was based in part on the value of their referrals.  The Stark Law restricts the financial relationships that hospitals and clinics may have with doctors who refer patients to them.  In announcing the settlement, the government stressed the importance of ensuring medical decisions remain untainted by these kinds of improper financial incentives:

Patients deserve assurances that they are receiving appropriate medical care, unbiased by hidden incentives.  And taxpayers deserve assurances that the cost of public health care programs is not inflated by unnecessary procedures and services.

The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by Dr. Viran Roger Holden, a physician who was employed by one of the defendant hospitals.  He will receive a whistleblower award of $5,440,000 from the proceeds of the government’s recovery.

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