Texas Hospital Settles Medicare Fraud Case for $21.75 Million
Citizens Medical Center, a county-owned hospital in Victoria, Texas, has agreed to pay the United States $21,750,000 to settle allegations that it violated the False Claims Act by engaging in improper financial relationships with referring physicians.
The Justice Department announced the settlement, citing the hospital’s alleged improper compensation to cardiologists and bonuses to emergency room physicians that took into account the value of their cardiology referrals. The Stark Statute restricts the financial relationships that hospitals may have with doctors who refer patients to them.
‘The Department of Justice has longstanding concerns about improper financial relationships between health care providers and their referral sources, because those relationships can alter a physician’s judgment about the patient’s true health care needs and drive up health care costs for everybody,’ said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division.
U.S. Attorney Kenneth Magidson of the Southern District of Texas noted that the settlement represents the effectiveness of their continuing efforts and an example of their priorities in combatting healthcare fraud.
The settlement resolved allegations that arose from a lawsuit filed by three whistleblowers, Dakshesh ‘Kumar’ Parikh, Harish Chandna, and Ajay Gaalla, under the qui tam provisions of the False Claims Act. The whistleblowers will collectively receive $5,981,250 from the recoveries announced today.
The case is a significant achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.
Since January 2009, the Justice Department has recovered a total of more than $24 billion through False Claims Act cases, with more than $15.3 billion of that amount recovered in cases involving fraud against federal healthcare programs.
Key Facts
- State: Texas
- Category: Healthcare Fraud
- Source: DOJ Press Release ↗
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