Catch of the Week: Sanford Health to pay over $20M for kickback, unnecessary spinal surgery claims brought by two Sanford doctors
Our Catch of the Week features a $20.25 million settlement with South Dakota-based Sanford Health, Sanford Medical Center, and Sanford Clinic announced by the Justice Department in an October 28, 2019 press release. The settlement resolves allegations the massive health system knowingly submitted claims for medically unnecessary spinal surgeries and tainted by kickbacks to a top Sanford neurosurgeon. Two Sanford surgeons, Drs. Carl Dustin Bechtold and Bryan Wellman, initiated the case in a whistleblower lawsuit under the qui tam provisions of the False Claims Act.
The company allegedly received numerous reports from its physicians that a top Sanford neurosurgeon was performing medically unnecessary spinal procedures using implantable devices in which the surgeon had a financial interest. Despite these repeated warnings from his colleagues, the Government says “Sanford continued to employ the neurosurgeon, continued to allow him to profit from the devices he used in surgeries performed at Sanford, and continued to submit claims to federal healthcare programs for these surgeries, including procedures that were medically unnecessary.” Sanford’s conduct thus allegedly violated the False Claims Act and the Anti-Kickback Statute.
In addition to the civil settlement, Sanford will face heightened ongoing scrutiny. Under a Corporate Integrity Agreement, Sanford must maintain compliance and risk assessment programs, and hire an Independent Review Organization to review claims for federal reimbursement from the affected medical center.
In the Department of Justice’s statement, District of South Dakota U.S. Attorney Ron Parsons said “kickback schemes and other improper financial incentives create inherent conflicts of interest and warp the medical decision-making process.” He pledged that his office “will continue to aggressively pursue anyone who colludes to violate federal law and compromise the integrity of our healthcare system.”
As a reward for bringing the fraud to light, the whistleblower pair will receive $3.4 million from the settlement proceeds.
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