Penn Highlands Healthcare, False Claims Act Infringement, Pennsylvania 2023

Penn Highlands Healthcare, a Pennsylvania not-for-profit corporation operating a hospital system in north, central, and western Pennsylvania, has agreed to pay the United States $735,000 to resolve a lawsuit alleging False Claims Act infringement through the submission of claims to Medicare and Medicaid resulting from violations of the Physician Self-Referral Law, commonly known as the Stark Law.

The Physician Self-Referral Law prohibits a medical provider from billing Medicare or Medicaid for certain services referred by physicians with whom the hospital has a financial relationship, unless that relationship satisfies one of the law’s statutory or regulatory exceptions. The Stark Law is intended to ensure that medical decision-making is not compromised by improper financial incentives and is instead based on the best interests of the patient.

In this case, the United States alleged that, from July 1, 2009, through June 30, 2012, Penn Highlands DuBois violated the Stark Law by paying improper compensation to referring physician Gary Ott, M.D., and to a physician employed by Women’s Care of Pennsylvania, Dr. Ott’s practice, in the amount of $420,000 under a Consulting, Medical Director and Related Services Agreement for “employment services” allegedly performed before the agreement went into effect, during which time neither physician was employed by Penn Highlands DuBois.

The settlement stems from a whistleblower complaint filed in October 2016 by three medical providers formerly employed by Penn Highlands pursuant to the qui tam provisions of the False Claims Act, which permit private persons, also called relators, to bring a lawsuit on behalf of the government and to share in the proceeds of the suit. The Act also permits the government to intervene and take over the lawsuit, as the government did in this case in regard to some of the relators’ allegations. The relators will receive $154,350 as part of the settlement.

The United States’ intervention and settlement in this matter illustrates the government’s emphasis on combating healthcare fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services at 1-800-HHS-TIPS (1-800-447-8477) or online at https://oig.hhs.gov/fraud/report-fraud/.

Defendant: Penn Highlands Healthcare

Criminal Charges: False Claims Act infringement through the submission of claims to Medicare and Medicaid resulting from violations of the Physician Self-Referral Law

City and State: Pittsburgh, Pennsylvania

Exact Date: October 2016

Sentence or Outcome: Penn Highlands Healthcare agreed to pay the United States $735,000 to resolve the lawsuit

Dollar Amounts: $735,000, $420,000, $154,350

Source: https://www.justice.gov/usao-wdpa/pr/penn-highlands-healthcare-pay-735000-settle-false-claims-act-allegations