UPMC Hamot, a hospital in Erie, Pennsylvania, and Medicor Associates Inc, a cardiology practice, have agreed to pay $20.7M to settle allegations that they violated the FCA by paying for patient referrals in violation of the Stark law and Anti-Kickback Statute. Generally speaking, the Stark law and Anti-kickback statute prohibit hospitals, physicians, pharmacies, nursing homes, durable medical equipment (DME) companies, pharmaceutical (drug) companies, medical device manufacturers, and other medical providers from paying or receiving kickbacks, remuneration, or anything of value in exchange for referrals of patients who will receive treatment paid for by government healthcare programs such as Medicare and Medicaid.
According to the allegations, from 2004 to 2010, Hamot Medical center was worried about competition for patients from St. Vincent Hospital. In response to competitive pressure, Hamot allegedly created sham directorships for doctors employed by Medicor Associates, enabling Hamot to pay the doctors more than they otherwise would make, in exchange for their referrals. The doctors were paid millions to refer patients to Hamot for a range of heart procedures.
The 2010 case was brought by a whistleblower, Tullio Emanuele, who was a cardiologist at Hamot Medical Center. Emanuele will receive a to-be-determined share of the settlement.
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