Akron General Health System, a regional hospital system based in Akron, Ohio, will pay $21 million to resolve allegations under the False Claims Act of improper relationships with certain referring physicians, resulting in the submission of false claims to the Medicare program.
The settlement resolves charges that between August 2010 and March 2016, AGHS paid compensation substantially in excess of fair market value to area physician groups to secure their referrals of patients, in violation of the Anti-Kickback Statute and the Physician Self-Referral Law, and then submitted claims for services provided to those illegally referred patients, in violation of the False Claims Act. The Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid, and other federally funded programs.
“Improper payments to physicians for referrals threaten the integrity of our health care system and deprive patients of the independent medical decision making that they deserve,” said Acting Assistant General Brian M. Boynton of the Justice Department’s Civil Division. “The Just Department is committed to upholding these important interests and to pursuing providers who engage in improper financial arrangements.”
The Physician Self-Referral Law, commonly known as the Stark Law, prohibits a hospital from billing Medicare for certain services referred by physicians with whom the hospital has an improper financial arrangement, including the payment of compensation that exceeds the fair market value of the services actually provided by the physician. The Clinic voluntarily disclosed to the government its concerns with these compensation arrangements, which were put in place by AGHS’s prior leadership, and received credit for its cooperation in the resolution reached by the parties.
The case highlights the need for compliance functions at health care organizations to monitor payments to physician groups to ensure fair-market values and to review the incentives provided to obtain referrals. 