A Dallas-based hospital will pay the U.S. $7.5 million to settle a False Claims Act lawsuit brought by two whistleblowers who accused the hospital of engaging in an illegal kickback scheme.
According to the U.S. Department of Justice, whistleblowers Suzanne Scott and Savannah Sogar claimed that Pine Creek Medical Center, a physician-owned hospital serving the Dallas/Fort Worth area, provided physicians with valuable kickbacks in exchange for surgical referrals. Both women were formerly employed in Pine Creek’s marketing department.
Supporting the whistleblowers’ allegations, federal prosecutors alleged that Pine Creek would pay for advertisements and other promotional materials benefitting the physicians with whom it had a kickback agreement. These ads appeared in a number of local and regional publications, radio and television spots, pay-per-click online ads, and billboards. The hospital also paid for brochures, website upgrades, business cards, and a range of other marketing services.
In exchange, participating physicians would refer their patients to Pine Creek for surgeries, including Medicare and TRICARE patients. Pine Creek would then bill the government for the surgeries performed on government health care beneficiaries. The government determined that the hospital engaged in the kickback schemes between 2009 and 2014.
The whistleblower complaint alleges Pine Creek violated the federal Anti-Kickback Statute, which prohibits health care providers from engaging in mutually beneficial kickback arrangements and then billing federal health care programs for the services provided.
In addition to the financial agreement, the settlement also commits Pine Creek to a five-year corporate integrity agreement with the Department of Health and Human Services Office of Inspector General, requiring the hospital to undertake substantial internal compliance reforms and monitoring.
“Hospitals that try to boost their profits by paying kickbacks to physicians will instead pay for their improper conduct,” said Special Agent in Charge C.J. Porter, Department of Health and Human Services, Office of Inspector General’s Dallas Region. “We will continue to investigate such illegal business arrangements that undermine impartial medical judgment.”
Ms. Scott and Ms. Sogar will receive a whistleblower award of $1,125,000 for their role in helping the U.S. government recover Medicare and TRICRE funds.