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Texas Hospital to Pay $21.8 Million to Settle Stark Law Case

According to an announcement from the U.S. Department of Justice, Citizens Medical Center in Texas will pay $21.8 million to the federal government to settle allegations of illegal payments to doctors in exchange for referrals. The hospital did not admit to any wrongdoing or liability as part of the settlement.

The government claimed Citizens paid a few of its cardiologists more than what is considered to be fair market value for their services. Allegedly, the hospital also paid bonuses to several emergency room doctors partly based on how valuable their referrals were. According to the Justice Department, these actions were in violation of the Stark Act, a law governing physician referrals and so-called kickbacks.

Whistleblowers may report alleged violations

The Department of Justice was made aware of these issues after three physicians who practiced at the hospital reported the alleged kickbacks. The doctors reportedly became aware of the scheme and decided to file a whistleblower complaint under the False Claims Act.

The False Claims Act allows whistleblowers to file lawsuits on the government’s behalf, and the government can then decide to join in on the lawsuits. Whistleblowers receive a portion of the money the government recovers in the ensuing case — usually anywhere between 10 and 30 percent. In this particular case, the Department of Justice said the three whistleblowers received a collective total of nearly $6 million.

If your organization would like to reduce the risk of health care fraud or Stark Act violations, contact the reliable NJ, NY, and PA health care defense attorneys at Buttaci Leardi & Werner, LLC to learn more about your best next steps.

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  • Posted on: Jun 2 2015