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Oklahoma City Hospital, Management Company, And Physician Group to Pay $72.3 Million To Settle Kickback and Stark Allegations

Posted  July 10, 2020

Oklahoma Center for Orthopaedic and Multi-Specialty Surgery (OCOM), a specialty hospital affiliated with Tenet Healthcare in Oklahoma City, Oklahoma, its part-owner and management company, USP OKC, Inc. and USP OKC Manager, Inc. (collectively USP), Southwest Orthopaedic Specialists, PLLC (SOS), an Oklahoma City-based physician group, and two SOS physicians, will pay $72.3 million to resolve kickback allegations relating to improper relationships between OCOM and SOS.

The settlement resolves allegations that between 2006 and 2018, OCOM and USP provided improper remuneration to SOS and certain of its physicians in exchange for patient referrals to OCOM in the form of (i) free or below-fair market value office space, employees, and supplies, (ii) compensation in excess of fair market value for the services provided by SOS and certain of its physicians, (iii) equity buyback provisions and payments for certain SOS physicians that exceeded fair market value, and (iv) preferential investment opportunities in connection with the provision of anesthesia services at OCOM.

The alleged conduct resulted in the submission of claims for services provided to these illegally referred patients, in violation of the False Claims Act and the Oklahoma Medicaid False Claims Act.

Acting Assistant Attorney General Ethan P. Davis of the Department of Justice Civil Division stated, “offering illegal financial incentives to physicians in return for patient referrals undermines the integrity of our health care system. Patients deserve the independent and objective judgment of their health care professionals.”

U.S. Attorney Timothy J. Downing for the Western District of Oklahoma added, “it is critical that we protect the integrity of federal health care benefit programs. Patients deserve care based on good medicine and informed choice, not the corrupting influence of money and other benefits.  No matter how complex and intertwined modern healthcare economics become, we are committed to ensuring that untainted care is always provided.”

Contemporaneous with the civil settlement, OCOM and SOS each entered into five-year Corporate Integrity Agreements with the U.S. Department of Health and Human Services – Office of Inspector General.  The CIAs require, among other things, that OCOM and SOS each maintain a compliance program and hire an Independent Review Organization to review arrangements entered into by or on behalf of their respective entities.  They also increase individual accountability by requiring compliance-related certifications from their key executives.

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Tagged in: Anti-Kickback and Stark, FCA Federal, FCA State, Medicaid,