Consumer Fraud

Missouri Hospitals Settle Whistleblower Lawsuit For $34 Million

Pills Stethascope on Money 435x289 Missouri Hospitals Settle Whistleblower Lawsuit For $34 MillionA whistleblower who sued two southwest Missouri hospitals alleging they violated the False Claims Act by engaging in improper financial relationships with referring physicians has helped the U.S. government recover $34 million to the Medicare program.

Dr. Viran Roger Holden filed the whistleblower lawsuit against Mercy Hospital Springfield and its affiliate Mercy Clinic Springfield Communities, which together operate a hospital, clinic, and infusion center in Springfield, Missouri. The hospitals were formerly known as St. John’s Regional Health Center and St. John’s Clinic, respectively.

Dr. Holden, who used to work for one of the hospitals, accused them of billing Medicare for chemotherapy services provided to patients who were referred to them by oncologists. But compensation for the referring physicians was based in part on a formula that took into account the value of the patient referrals to the infusion center operated by the defendants.

Federal law restricts the financial relationships that hospitals and clinics may have with physicians who refer patients to them – a measure intended to preserve the integrity of the medical services Medicare beneficiaries receive.

The U.S. Department of Justice investigated Dr. Holden’s allegations and chose to intervene in the case, effectively taking over the prosecution.

“When physicians are rewarded financially for referring patients to hospitals or other health care providers, it can affect their medical judgment, resulting in overutilization of services that drives up health care costs for everyone,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “In addition to yielding a recovery for taxpayers, this settlement should deter similar conduct in the future and help make health care more affordable.”

Steven Hanson, Special Agent for the Department of Health and Human Services said that when physicians’ referrals are clouded by improper financial arrangements, “patients are left to wonder whether their doctor’s judgment has been tainted and motivated by financial interests.”

Dr. Holden will receive $5.44 million of the total recovery as a whistleblower award.