Consumer Fraud

Georgia Hospital Settles False Claims Act Suit, Agrees to Pay $5 Million

Pills Stethascope on Money 435x289 Georgia Hospital Settles False Claims Act Suit, Agrees to Pay $5 MillionA North Georgia hospital will pay $5 million to settle allegations it violated the False Claims Act by engaging in improper financial relationships with referring physicians.

Union General Hospital of Blairsville, Georgia, fell under scrutiny when federal authorities detected suspicious activity surrounding the abnormally high quantities of opioid drugs and Xanax being prescribed in connection with the hospital. Investigations by the FBI and other federal agencies led to the arrest of Union General Hospital CEO John Michael Gowder and two physicians — Dr. David Gowder and Dr. James Heaton. The three men now face federal charges of illegally prescribing thousands of doses of pain medications.

Shortly after the FBI arrested Mr. Gowder and the physicians, Union General replaced most of its executive team, launched an internal investigation, and cooperated with federal authorities by divulging “significant amounts of information related to several financial relationships with physicians and physician practices.”

That information led to the False Claims Act allegations the U.S. levied against Union General Hospital in a civil suit.

According to the U.S., Union General engaged in several different improper financial relationships with physicians between 2012 and 2016, in violation of the Stark Law.

The Stark Law forbids hospitals from billing Medicare for certain services referred by physicians who have a financial relationship with the hospital unless the relationship falls within a defined exception.

“It is unacceptable for hospitals to provide financial incentives to induce physicians to steer patients their way,” said Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta. “The OIG will vigorously pursue providers who enter into arrangements that can potentially corrupt medical decision making.”