The Department of Justice announced Friday that Pine Creek Medical Center LLC, a physician-owned hospital based in the Dallas/Fort Worth area, agreed to pay $7.5 million to settle claims it violated the False Claims Act. The claims centered on allegations that Pine Creek paid physicians kickbacks through marketing services in exchange for surgical referrals. The government alleged that between 2009 and 2014, Pine Creek would pay for and provide physician marketing services and would expect physicians to refer patients to the hospital including Medicare and TRICARE patients.
The alleged kickbacks included the hospital paying for physician advertisements in local and regional publications. Pine Creek also allegedly paid for radio and TV advertisements, internet pay-per-click advertising campaigns, billboards, website upgrades, brochures, and business cards. Pine Creek also paid for other non-mentioned types of marketing to induce the physicians to refer their surgical patients to Pine Creek.
As part of the settlement, Pine Creek agreed to enter into a Corporate Integrity Agreement with HHS-OIG for the next five years. The allegations were originally brought by two whistleblowers, Suzanne Scott and Savannah Sogar, who were former employees of Pine Creek’s marketing department. The two whistleblowers will receive $1,125,000. This represents a relator share of approximately 15%.
Principal Deputy Assistant Attorney General Chad A. Readler, head of the Justice Department’s Civil Division, commented “Health care providers that attempt to profit from illegal kickbacks will be held accountable. Improper financial incentives can distort medical decision making and drive up healthcare costs for federal health care programs and their beneficiaries.” Special Agent in Charge C.J. Porter, Department of Health and Human Services, Office of Inspector General’s Dallas Region added on to that sentiment by saying “Hospitals that try to boost their profits by paying kickbacks to physicians will instead pay for their improper conduct. We will continue to investigate such illegal business arrangements that undermine impartial medical judgment.”
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