Missouri Healthcare Providers Agree to Settle False Claims Act Allegations

Missouri’s Mercy Health has agreed to settle allegations it engaged in an unlawful kickback scheme.
Image source: Wikimedia Commons

When the H.E.A.T. Task Force convened in 2009, part of their mission was to eliminate costly and wasteful kickback schemes from the government-backed healthcare system. Kickback schemes, like the one profiled in today’s case, often involve improper financial arrangements between doctors either pharmaceutical companies or major healthcare corporations. In essence, the federal government seeks to do away with these relationships because the arrangement places an unfair ‘taint’ on the doctor-patient relationship, prompting physicians to make care decisions based on expected profits rather than what is in the best interest of the patient.

In today’s case,[1. Mercy agrees to pay U.S. $5.5 million to settle alleged false claims act violations.” August 22, 2015. http://republicmonews.com/news/mercy-agrees-to-pay-u-s-million-to-settle-alleged/article_4e300da2-45dc-11e5-8873-9fbfc92dc118.html]  two southern Missouri healthcare facilities are facing allegations of illegal kickbacks following the filing of a whistleblower lawsuit by a former doctor within the Mercy Health group. In exchange for her willingness to come forward, the whistleblower is expected to receive a reward of $825,000.

Details of the allegations against Mercy Health

Mercy Health maintains two provider groups in Missouri known as Mercy Health Springfield Communities, formerly known as St. John’s Health System Inc., and its affiliate, Mercy Clinic Springfield Communities, formerly known as St. John’s Clinic, which operates healthcare facilities in southwest Missouri.

While the details of the scheme are somewhat sparse within the government’s press release,[2. “Missouri Hospital Agrees to Pay United States $5.5 Million to Settle Alleged False Claims Act Violations.” DOJ Press Release, August 13, 2015. http://www.justice.gov/opa/pr/missouri-hospital-agrees-pay-united-states-55-million-settle-alleged-false-claims-act] the Department of Justice did reveal that the defendants were allegedly rewarding regional doctors for the number and volume of patient referrals – a practice expressly forbidden by the False Claims Act and the Stark Law. More specifically, the defendants are alleged to have offered end-of-the-year bonuses to physicians based solely on that physician’s record of referring patients to the Mercy Health system.[3. Mercy Settlement Agreement. http://www.scribd.com/doc/275066132/Mercy-Settlement-Agreement#scribd]

Government’s response

The U.S. Attorney General’s Office commented in a statement, “Financial relationships between healthcare providers and their referral sources must be structured to comply with all applicable laws…. When physicians are rewarded financially for referring patients to hospitals or other healthcare providers, it can affect their medical judgment, resulting in overutilization of services that drives up healthcare costs for everyone. In addition to yielding a recovery for taxpayers, this settlement should deter similar conduct in the future and help make healthcare more affordable.”

The Department of Health and Human Services similarly commented, stating, “Healthcare organizations paying physicians based on referrals – as alleged in this case – undermines public trust in medical institutions and the financial integrity of federal healthcare programs…. We will aggressively pursue organizations that engage in conduct detrimental to taxpayers and government health programs.”

Since 2009, the U.S. government has recovered close to $16 billion as a result of healthcare fraud.

Contact Berger Montague today

If you work in the healthcare industry and believe fraud may be afoot – particularly with regard to Medicare and Medicaid patients – please do not hesitate to contact Berger Montague today.