The North Broward Hospital District, a special taxing district in Florida that operates hospitals and other health care facilities, will pay the U.S. $69.5 million to settle allegations that it violated the False Claims Act by engaging in improper financial relationships with referring physicians, the Justice Department announced Tuesday.
The settlement resolves allegations of fraud brought to the federal government’s attention by Dr. Michael Reilly, who sued North Broward Hospital District under the whistleblower provisions of the False Claims Act, which authorizes individuals to sue on behalf of the U.S.
Dr. Reilly and the U.S. accused the hospital district of providing compensation for services that exceeded the fair market value to nine of its employed physicians, a violation of the federal Stark Statute and the False Claims Act. The Stark Statute restricts the financial relationships that hospitals may have with doctors who refer patients to them.
Benjamin Mizer, head of the Justice Department’s Civil Division, said the case underscores the government’s “long-standing concerns about improper financial relationships between health care providers and their referral sources,” saying such arrangements “can alter a physician’s judgment about the patient’s true health care needs and drive up health care costs for everybody.”
Department of Health and Human Services Special Agent Shimon Richmond said his agency will “continue to root out such behavior from our health care system.”
“Improper financial rewards given to physicians in exchange for patient referrals corrupts medical decision making and inflates health care costs,” Mr. Richmond said.
Whistleblowers whose False Claims Act complaints lead to a judgement or settlement are entitled to receive up to 30 percent of the total amount recovered as their award. Dr. Reilly was awarded more than $12 million for his role in exposing the illegal financial relationships in the hospital district.
Source: U.S. Department of Justice