The corporate owner-operator of two Queens, New York, hospitals has agreed to pay $4 million to settle a whistleblower lawsuit alleging it unlawfully billed Medicare for services forged from unlawful financial relationships with referring doctors.
According to the whistleblower lawsuit, MediSys Health Network, Inc., which owns and operates Flushing Hospital Medical Center and Jamaica Hospital Medical Center, violated the False Claims Act by failing to comply with the requirements of the Stark Law, which restricts the financial relationships that hospitals may have with the physicians who refer patients to them.
“When hospital operators provide financial incentives to doctors for patient referrals, individuals rightfully wonder whose best interests are being served,” said Special Agent in Charge Scott Lampert for U.S. Department of Health and Human Services Office of Inspector General. “We will continue to investigate such entities who fraudulently bill government health programs.”
The U.S. Department of Justice said the lawsuit was filed by Dr. Satish Deshpande under the whistleblower provisions of the False Claims Act, which gives private parties the authority to file complaints on behalf of the U.S. government in cases of suspected fraud against taxpayer-funded programs and agencies.
Federal prosecutors investigated Dr. Deshpande’s claims and chose to become an active participant in the litigation. Investigators determined that the Medisys hospitals submitted false claims to Medicare for services they provided to patients referred by physicians who maintained unlawful financial relationships with the hospitals.
“Health care providers who enter into improper financial relations with referring physicians compromise the referral process and encourage over-utilization of services, to the potential detriment of both patients and taxpayers,” said Acting U.S. Attorney Bridget M. Rohde for the Eastern District of New York.
Dr. Deshpande will receive $600,000 (about 15 percent of the total recovery) as a whistleblower award for his role in helping the U.S. government recover Medicare funds.