In yet another alleged healthcare fraud scheme, a rural southern Georgia hospital has agreed to offer $520,000 to settle allegations of illegal kickbacks and unlawful referral schemes. The agreement helps to correct and deter such conduct on both the federal and state level, as the Georgia Medicaid system is set to receive a portion of the proceeds. According to the Department of Justice, close to a dozen doctors were also implicated in the scheme and may have settled privately with the government.
The case was commenced in 2013 by two courageous whistleblowers, both of whom were employed with the Irwin County Hospital Authority at the time. Currently, the amount of reward money reserved for both whistleblowers has not been determined. However, whistleblowers can receive up to 30 percent of the overall settlement or verdict reached.
Details of the allegations against Irwin County Hospital Authority
According to the details of the allegations, Irwin County Hospital Authority conspired with a number of doctors and medical professionals in the region in order to drum up referrals and increase profitability. However, this type of arrangement is prohibited with regard to any patient who is receiving government benefits under Medicare or Medicaid. Under the False Claims Act and the Stark Law, as well as the applicable Georgia Medicaid policies, it is considered an unlawful “taint” on the doctor-patient relationship for any practitioner to make a medical recommendation and referral for service or treatment based on that doctor’s anticipation of a financial reward. Accordingly, any subsequent submissions of invoices for reimbursement based on an unlawful financial relationship are considered violations of these laws and may trigger liability.
While the Department of Justice did not release exhaustive details on the scheme, the details of the press release reveal that the hospital authority engaged in the following misconduct:
- Overpayment of physician salaries in an amount beyond market value for similar services in comparable communities;
- Lease agreements executed between the hospital authority and several practitioners for office space which were not for market value, and presumably deeply discounted in exchange for the promise to refer patients exclusively to the Irwin County hospital system;
- Failure to arrange for proper supervision of diagnostic services performed at the Irwin County Hospital in violation of Medicaid and Medicare guidelines.
The U.S. Attorney’s Office said in a statement:
“One important mission of this office’s Civil Division is to ensure that when taxpayer money is paid out under federal healthcare programs, it is paid out in a manner that complies with federal healthcare laws….Whistleblower lawsuits, like this case, are an increasingly important way in which our office is able to protect the integrity of the many federal programs that the citizens of Middle Georgia rely on each and every day.”
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