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False Claim Act Cases and Settlements Involving Hospital Financial Relationships with Referring Physicians

Hospital financial relationships with referring physicians continues to be a significant area of regulatory scrutiny and targets of whistleblower suits under the False Claims Act through the first half of 2019.  Since January 2019, the U. S. Department of Justice (DOJ) has announced several settlements involving hospitals and decisions in False Claims Act cases involving allegations of Stark Law and Anti-Kickback Statute violations based on physician financial relationships.  
 
False Claims Act Claims Concerning Physician Compensation 
 
On January 28, 2019, the DOJ announced that Avanti Hospitals LLC in Los Angeles and six of its owners will pay $8.1 million to settle claims that they violated the False Claims Act by submitting false claims to the Medicare and Medicaid programs for medical services referred by a physician who received kickbacks and other improper payments from a hospital owned by Avanti Hospitals LLC.  The government alleged that the payments from Avanti Hospitals to a high-referring physician violated the Stark Law and Anti-Kickback Statute.
 
A former CEO of a hospital owned by Avanti Hospitals had filed suit under the whistleblower provisions of the False Claims Act alleging that Avanti provided compensation to a physician engaged as a medical director that (1) exceeded fair market value, and (2) was an attempt to incentivize him to refer patients to an Avanti-owned hospital.  
 
On February 6, 2019, the DOJ announced that Union General Hospital in Georgia agreed to pay $5,000,000 to resolve allegations that it violated the False Claims Act based on improper financial relationships with referring physicians.  The DOJ alleged that the hospital compensated physicians in amounts that were above or inconsistent with fair market value or in a manner that took into account the volume or value of the physician’s referrals.

On March 21, 2019, the United States Department of Justice (DOJ) announced that MedStar Health, a health system in Maryland and Washington, D.C., and two of its hospitals agreed to pay $35 million to settle allegations that they violated the False Claims Act by paying kickbacks to a cardiology group in exchange for patient referrals through a series of professional service agreements, and submitting false claims to Medicare for medically unnecessary cardiology procedures.  
 
The kickback allegations against MedStar were brought by three cardiac surgeons as whistleblowers that the two hospitals owned by MedStar paid kickbacks to referring cardiologists with MidAtlantic Cardiovascular Associates under professional service agreements.  The physician whistleblowers alleged that the compensation paid under the professional service agreements to MidAtlantic Cardiovascular Associates were in return for referrals of cardiovascular procedures and interventional cardiology procedures. According to the whistleblowers’ complaint, some of the services promised and paid for by the MedStar hospitals under the professional service agreements were never provided. 
 
The MedStar settlement also resolves the whistleblowers’ allegations that MedStar submitted false claims to Medicare from January 1, 2006 through December 28, 2012 for medically unnecessary stents performed by a physician under the professional service agreement with MidAtlantic Cardiovascular Associates. In a related case, the DOJ entered into a settlement in 2010 with St. Joseph Medical Center that also resolved allegations that another MidAtlantic Cardiovascular Associates physician performed unnecessary stent procedures.

 On March 25, 2019, the DOJ announced that it had filed a complaint under the whistleblower provisions of the False Claims Act against Wheeling Hospital, Inc., and the hospital’s contracted management consultant based on alleged violations of the Stark Law and Anti-Kickback Statute.  The government claimed that those violations were caused by the hospital’s contracted management consultant and Wheeling Hospital’s CEO Ronald Violo.  

The DOJ alleged that Wheeling Hospital’s compensation to several employed and contacted physicians violated the Stark Law and Anti-Kickback Statute because the compensation was based on the volume or value of the physician’s referrals, exceeded the fair market value of the physician’s services and was not commercially reasonable.  According to the government’s complaint, Wheeling Hospital paid excessive compensation to certain employed physicians, including paying some physicians over $1 million a year which the government asserted was well in excess of accepted industry surveys and standards for physician compensation.  
 
The DOJ also alleged that Wheeling Hospital knew that several employed physician salaries were excessive and that the hospital would lose money on these physicians based on internal hospital documents.  The government further alleged that Wheeling Hospital consistently tracked the amount of downstream revenue generated by referrals from employed physicians and specifically determined that the inflated salaries and significant losses were justified because of the “downstream revenues”.  
 
The complaint filed by the government included the following examples of how Wheeling Hospital overpaid many of its employed physicians:
 
    (1)In 2009, Wheeling Hospital entered into an employment agreement with the highest revenue generating OB/GYN in the hospital’s region. The hospital paid this OB/GYN between $1 million and $1.27 million per year for seven years. Internal document of the hospital provided that the median salary during this same time period for an OB/GYN was $282,645 and the 90th percentile salary was $492,321 according to the MGMA.  The government also cited a comment by the hospital’s COO in an internal document that the salary to this OB/GYN made it “almost impossible for this practice to show a bottom line profit.”
 
    (2)In 2008, Wheeling Hospital entered into an employment agreement with another OB/GYN for a five year term, which included a base salary of $650,000 plus 80% of the practice net income.  The government commented that this physician’s compensation was more than twice the median MGMA salary for an OB/GYN and well in excess of the 90th percentile of MGMA salary data.
 
    (3)In 2011, Wheeling Hospital entered into employment agreements with two radiation oncologists that included base compensation of $1,140,000 and $1,150,000 respectively, and a “bonus to be determined by the CEO” of the hospital.  The government commented that these salaries in 2016 were twice the median MGMA salary ($500,000) and well in excess of the 90th percentile ($781,545).
 
The Wheeling Hospital case is a good example of the need for a hospital to maintain documentation of supporting the fair market value of compensation paid to employed and contracted physicians.
 
Financial Arrangements with Emergency Room Physicians

On April 30, 2019, the DOJ announced that a former CEO of Health Management Associates (HMA) agreed to pay $3.46 million to resolve false billing and kickback allegations.  This settlement resolved allegations that the hospital former CEO caused HMA to knowingly submit false claims to government healthcare programs by admitting patients that could have been treated on a less costly, outpatient basis.  The settlement also resolved allegations that the hospitals CEO caused HMA to pay remuneration to emergency department physicians in return for referrals.
 
This settlement resolves allegations that the former CEO of this hospital chain caused HMA to pressure emergency department physicians to increase inpatient admissions by recommending admission without regard to medical necessity.  The DOJ also alleged that the former hospital chain CEO caused HMA to pay remuneration to EmCare, a physician staffing company, to recommend admission when patients should have been treated on an outpatient basis.   The DOJ also alleged that the former HMA CEO caused HMA to make certain bonus payments to EmCare emergency department physicians and tied EmCare’s retention of existing contracts and receipt of new contracts to increase admissions of patients who came to the emergency department.  
 
HMA and EmCare have already resolved their liability to the government related to these allegations.  In September 2018, HMA entered into a civil settlement under which it paid $61.8 million to the government.  HMA also entered into a non-prosecution agreement with the criminal division’s fraud section under which it paid $35 million.  
 
FCA Settlement Based on Loan Forbearance to Referring Physicians
 
On June 3, 2019, the DOJ announced that Rialto Capital Management, LLC, a private equity group, and a former affiliate of Rialto Capital that owned Kentuckiana Medical Center (KMC) agreed to pay $3.6 million to resolve False Claims Act allegations based on kickbacks to referring physicians.  Rialto Capital had acquired KMC through bankruptcy reorganization in 2013, and had subsequently offered partial ownership in KMC’s real estate to certain physicians who had been important referral sources for KMC, but the real estate ownership offers were challenged in the bankruptcy proceedings.
 
Rialto Capital subsequently approved personal loans from KMC to the hospital’s key referral sources.  This settlement resolves allegations that KMC, under the direction of Rialto Capital, repeatedly forbore the physicians from requiring payment of those loans for more than two years after each loan matured and became due in full. The DOJ alleged that KMC’s failure to collect on payment of these loans from key physician referrals sources constituted a form of remuneration prohibited by both the Anti-Kickback Statute and the Stark Law.
 
Settlement Based on Electronic Health Records Incentive Program
 
On May 31, 2019, the DOJ announced that Coffey Health System in Kansas agreed to pay $250,000 to settle claims that they violated the False Claims Act.  The Coffey Health System operates a 25-bed critical access hospital located in Burlington, Kansas.  The DOJ alleged that Coffey Health System falsely attested that it conducted and/or reviewed security risk analyses in accordance with the requirement under the electronic health records (EHR) incentive program in 2012 and 2013.  The DOJ specifically alleged that the Coffey Health System falsely attested that they satisfied the measures of requirements for analyzing and addressing security risk to electronic health records.
 
 

False Claim Act Cases and Settlements Involving Hospital Financial Relationships with Referring Physicians

Hospital financial relationships with referring physicians continues to be a significant area of regulatory scrutiny and targets of whistleblower suits under the False Claims Act through the first half of 2019.  Since January 2019, the U. S. Department of Justice (DOJ) has announced several settlements involving hospitals and decisions in False Claims Act cases involving allegations of Stark Law and Anti-Kickback Statute violations based on physician financial relationships.  
 
False Claims Act Claims Concerning Physician Compensation 
 
On January 28, 2019, the DOJ announced that Avanti Hospitals LLC in Los Angeles and six of its owners will pay $8.1 million to settle claims that they violated the False Claims Act by submitting false claims to the Medicare and Medicaid programs for medical services referred by a physician who received kickbacks and other improper payments from a hospital owned by Avanti Hospitals LLC.  The government alleged that the payments from Avanti Hospitals to a high-referring physician violated the Stark Law and Anti-Kickback Statute.
 
A former CEO of a hospital owned by Avanti Hospitals had filed suit under the whistleblower provisions of the False Claims Act alleging that Avanti provided compensation to a physician engaged as a medical director that (1) exceeded fair market value, and (2) was an attempt to incentivize him to refer patients to an Avanti-owned hospital.  
 
On February 6, 2019, the DOJ announced that Union General Hospital in Georgia agreed to pay $5,000,000 to resolve allegations that it violated the False Claims Act based on improper financial relationships with referring physicians.  The DOJ alleged that the hospital compensated physicians in amounts that were above or inconsistent with fair market value or in a manner that took into account the volume or value of the physician’s referrals.

On March 21, 2019, the United States Department of Justice (DOJ) announced that MedStar Health, a health system in Maryland and Washington, D.C., and two of its hospitals agreed to pay $35 million to settle allegations that they violated the False Claims Act by paying kickbacks to a cardiology group in exchange for patient referrals through a series of professional service agreements, and submitting false claims to Medicare for medically unnecessary cardiology procedures.  
 
The kickback allegations against MedStar were brought by three cardiac surgeons as whistleblowers that the two hospitals owned by MedStar paid kickbacks to referring cardiologists with MidAtlantic Cardiovascular Associates under professional service agreements.  The physician whistleblowers alleged that the compensation paid under the professional service agreements to MidAtlantic Cardiovascular Associates were in return for referrals of cardiovascular procedures and interventional cardiology procedures. According to the whistleblowers’ complaint, some of the services promised and paid for by the MedStar hospitals under the professional service agreements were never provided. 
 
The MedStar settlement also resolves the whistleblowers’ allegations that MedStar submitted false claims to Medicare from January 1, 2006 through December 28, 2012 for medically unnecessary stents performed by a physician under the professional service agreement with MidAtlantic Cardiovascular Associates. In a related case, the DOJ entered into a settlement in 2010 with St. Joseph Medical Center that also resolved allegations that another MidAtlantic Cardiovascular Associates physician performed unnecessary stent procedures.

 On March 25, 2019, the DOJ announced that it had filed a complaint under the whistleblower provisions of the False Claims Act against Wheeling Hospital, Inc., and the hospital’s contracted management consultant based on alleged violations of the Stark Law and Anti-Kickback Statute.  The government claimed that those violations were caused by the hospital’s contracted management consultant and Wheeling Hospital’s CEO Ronald Violo.  

The DOJ alleged that Wheeling Hospital’s compensation to several employed and contacted physicians violated the Stark Law and Anti-Kickback Statute because the compensation was based on the volume or value of the physician’s referrals, exceeded the fair market value of the physician’s services and was not commercially reasonable.  According to the government’s complaint, Wheeling Hospital paid excessive compensation to certain employed physicians, including paying some physicians over $1 million a year which the government asserted was well in excess of accepted industry surveys and standards for physician compensation.  
 
The DOJ also alleged that Wheeling Hospital knew that several employed physician salaries were excessive and that the hospital would lose money on these physicians based on internal hospital documents.  The government further alleged that Wheeling Hospital consistently tracked the amount of downstream revenue generated by referrals from employed physicians and specifically determined that the inflated salaries and significant losses were justified because of the “downstream revenues”.  
 
The complaint filed by the government included the following examples of how Wheeling Hospital overpaid many of its employed physicians:
 
    (1)In 2009, Wheeling Hospital entered into an employment agreement with the highest revenue generating OB/GYN in the hospital’s region. The hospital paid this OB/GYN between $1 million and $1.27 million per year for seven years. Internal document of the hospital provided that the median salary during this same time period for an OB/GYN was $282,645 and the 90th percentile salary was $492,321 according to the MGMA.  The government also cited a comment by the hospital’s COO in an internal document that the salary to this OB/GYN made it “almost impossible for this practice to show a bottom line profit.”
 
    (2)In 2008, Wheeling Hospital entered into an employment agreement with another OB/GYN for a five year term, which included a base salary of $650,000 plus 80% of the practice net income.  The government commented that this physician’s compensation was more than twice the median MGMA salary for an OB/GYN and well in excess of the 90th percentile of MGMA salary data.
 
    (3)In 2011, Wheeling Hospital entered into employment agreements with two radiation oncologists that included base compensation of $1,140,000 and $1,150,000 respectively, and a “bonus to be determined by the CEO” of the hospital.  The government commented that these salaries in 2016 were twice the median MGMA salary ($500,000) and well in excess of the 90th percentile ($781,545).
 
The Wheeling Hospital case is a good example of the need for a hospital to maintain documentation of supporting the fair market value of compensation paid to employed and contracted physicians.
 
Financial Arrangements with Emergency Room Physicians

On April 30, 2019, the DOJ announced that a former CEO of Health Management Associates (HMA) agreed to pay $3.46 million to resolve false billing and kickback allegations.  This settlement resolved allegations that the hospital former CEO caused HMA to knowingly submit false claims to government healthcare programs by admitting patients that could have been treated on a less costly, outpatient basis.  The settlement also resolved allegations that the hospitals CEO caused HMA to pay remuneration to emergency department physicians in return for referrals.
 
This settlement resolves allegations that the former CEO of this hospital chain caused HMA to pressure emergency department physicians to increase inpatient admissions by recommending admission without regard to medical necessity.  The DOJ also alleged that the former hospital chain CEO caused HMA to pay remuneration to EmCare, a physician staffing company, to recommend admission when patients should have been treated on an outpatient basis.   The DOJ also alleged that the former HMA CEO caused HMA to make certain bonus payments to EmCare emergency department physicians and tied EmCare’s retention of existing contracts and receipt of new contracts to increase admissions of patients who came to the emergency department.  
 
HMA and EmCare have already resolved their liability to the government related to these allegations.  In September 2018, HMA entered into a civil settlement under which it paid $61.8 million to the government.  HMA also entered into a non-prosecution agreement with the criminal division’s fraud section under which it paid $35 million.  
 
FCA Settlement Based on Loan Forbearance to Referring Physicians
 
On June 3, 2019, the DOJ announced that Rialto Capital Management, LLC, a private equity group, and a former affiliate of Rialto Capital that owned Kentuckiana Medical Center (KMC) agreed to pay $3.6 million to resolve False Claims Act allegations based on kickbacks to referring physicians.  Rialto Capital had acquired KMC through bankruptcy reorganization in 2013, and had subsequently offered partial ownership in KMC’s real estate to certain physicians who had been important referral sources for KMC, but the real estate ownership offers were challenged in the bankruptcy proceedings.
 
Rialto Capital subsequently approved personal loans from KMC to the hospital’s key referral sources.  This settlement resolves allegations that KMC, under the direction of Rialto Capital, repeatedly forbore the physicians from requiring payment of those loans for more than two years after each loan matured and became due in full. The DOJ alleged that KMC’s failure to collect on payment of these loans from key physician referrals sources constituted a form of remuneration prohibited by both the Anti-Kickback Statute and the Stark Law.
 
Settlement Based on Electronic Health Records Incentive Program
 
On May 31, 2019, the DOJ announced that Coffey Health System in Kansas agreed to pay $250,000 to settle claims that they violated the False Claims Act.  The Coffey Health System operates a 25-bed critical access hospital located in Burlington, Kansas.  The DOJ alleged that Coffey Health System falsely attested that it conducted and/or reviewed security risk analyses in accordance with the requirement under the electronic health records (EHR) incentive program in 2012 and 2013.  The DOJ specifically alleged that the Coffey Health System falsely attested that they satisfied the measures of requirements for analyzing and addressing security risk to electronic health records.
 
 

False Claim Act Cases and Settlements Involving Hospital Financial Relationships with Referring Physicians

Hospital financial relationships with referring physicians continues to be a significant area of regulatory scrutiny and targets of whistleblower suits under the False Claims Act through the first half of 2019.  Since January 2019, the U. S. Department of Justice (DOJ) has announced several settlements involving hospitals and decisions in False Claims Act cases involving allegations of Stark Law and Anti-Kickback Statute violations based on physician financial relationships.  
 
False Claims Act Claims Concerning Physician Compensation 
 
On January 28, 2019, the DOJ announced that Avanti Hospitals LLC in Los Angeles and six of its owners will pay $8.1 million to settle claims that they violated the False Claims Act by submitting false claims to the Medicare and Medicaid programs for medical services referred by a physician who received kickbacks and other improper payments from a hospital owned by Avanti Hospitals LLC.  The government alleged that the payments from Avanti Hospitals to a high-referring physician violated the Stark Law and Anti-Kickback Statute.
 
A former CEO of a hospital owned by Avanti Hospitals had filed suit under the whistleblower provisions of the False Claims Act alleging that Avanti provided compensation to a physician engaged as a medical director that (1) exceeded fair market value, and (2) was an attempt to incentivize him to refer patients to an Avanti-owned hospital.  
 
On February 6, 2019, the DOJ announced that Union General Hospital in Georgia agreed to pay $5,000,000 to resolve allegations that it violated the False Claims Act based on improper financial relationships with referring physicians.  The DOJ alleged that the hospital compensated physicians in amounts that were above or inconsistent with fair market value or in a manner that took into account the volume or value of the physician’s referrals.

On March 21, 2019, the United States Department of Justice (DOJ) announced that MedStar Health, a health system in Maryland and Washington, D.C., and two of its hospitals agreed to pay $35 million to settle allegations that they violated the False Claims Act by paying kickbacks to a cardiology group in exchange for patient referrals through a series of professional service agreements, and submitting false claims to Medicare for medically unnecessary cardiology procedures.  
 
The kickback allegations against MedStar were brought by three cardiac surgeons as whistleblowers that the two hospitals owned by MedStar paid kickbacks to referring cardiologists with MidAtlantic Cardiovascular Associates under professional service agreements.  The physician whistleblowers alleged that the compensation paid under the professional service agreements to MidAtlantic Cardiovascular Associates were in return for referrals of cardiovascular procedures and interventional cardiology procedures. According to the whistleblowers’ complaint, some of the services promised and paid for by the MedStar hospitals under the professional service agreements were never provided. 
 
The MedStar settlement also resolves the whistleblowers’ allegations that MedStar submitted false claims to Medicare from January 1, 2006 through December 28, 2012 for medically unnecessary stents performed by a physician under the professional service agreement with MidAtlantic Cardiovascular Associates. In a related case, the DOJ entered into a settlement in 2010 with St. Joseph Medical Center that also resolved allegations that another MidAtlantic Cardiovascular Associates physician performed unnecessary stent procedures.

 On March 25, 2019, the DOJ announced that it had filed a complaint under the whistleblower provisions of the False Claims Act against Wheeling Hospital, Inc., and the hospital’s contracted management consultant based on alleged violations of the Stark Law and Anti-Kickback Statute.  The government claimed that those violations were caused by the hospital’s contracted management consultant and Wheeling Hospital’s CEO Ronald Violo.  

The DOJ alleged that Wheeling Hospital’s compensation to several employed and contacted physicians violated the Stark Law and Anti-Kickback Statute because the compensation was based on the volume or value of the physician’s referrals, exceeded the fair market value of the physician’s services and was not commercially reasonable.  According to the government’s complaint, Wheeling Hospital paid excessive compensation to certain employed physicians, including paying some physicians over $1 million a year which the government asserted was well in excess of accepted industry surveys and standards for physician compensation.  
 
The DOJ also alleged that Wheeling Hospital knew that several employed physician salaries were excessive and that the hospital would lose money on these physicians based on internal hospital documents.  The government further alleged that Wheeling Hospital consistently tracked the amount of downstream revenue generated by referrals from employed physicians and specifically determined that the inflated salaries and significant losses were justified because of the “downstream revenues”.  
 
The complaint filed by the government included the following examples of how Wheeling Hospital overpaid many of its employed physicians:
 
    (1)In 2009, Wheeling Hospital entered into an employment agreement with the highest revenue generating OB/GYN in the hospital’s region. The hospital paid this OB/GYN between $1 million and $1.27 million per year for seven years. Internal document of the hospital provided that the median salary during this same time period for an OB/GYN was $282,645 and the 90th percentile salary was $492,321 according to the MGMA.  The government also cited a comment by the hospital’s COO in an internal document that the salary to this OB/GYN made it “almost impossible for this practice to show a bottom line profit.”
 
    (2)In 2008, Wheeling Hospital entered into an employment agreement with another OB/GYN for a five year term, which included a base salary of $650,000 plus 80% of the practice net income.  The government commented that this physician’s compensation was more than twice the median MGMA salary for an OB/GYN and well in excess of the 90th percentile of MGMA salary data.
 
    (3)In 2011, Wheeling Hospital entered into employment agreements with two radiation oncologists that included base compensation of $1,140,000 and $1,150,000 respectively, and a “bonus to be determined by the CEO” of the hospital.  The government commented that these salaries in 2016 were twice the median MGMA salary ($500,000) and well in excess of the 90th percentile ($781,545).
 
The Wheeling Hospital case is a good example of the need for a hospital to maintain documentation of supporting the fair market value of compensation paid to employed and contracted physicians.
 
Financial Arrangements with Emergency Room Physicians

On April 30, 2019, the DOJ announced that a former CEO of Health Management Associates (HMA) agreed to pay $3.46 million to resolve false billing and kickback allegations.  This settlement resolved allegations that the hospital former CEO caused HMA to knowingly submit false claims to government healthcare programs by admitting patients that could have been treated on a less costly, outpatient basis.  The settlement also resolved allegations that the hospitals CEO caused HMA to pay remuneration to emergency department physicians in return for referrals.
 
This settlement resolves allegations that the former CEO of this hospital chain caused HMA to pressure emergency department physicians to increase inpatient admissions by recommending admission without regard to medical necessity.  The DOJ also alleged that the former hospital chain CEO caused HMA to pay remuneration to EmCare, a physician staffing company, to recommend admission when patients should have been treated on an outpatient basis.   The DOJ also alleged that the former HMA CEO caused HMA to make certain bonus payments to EmCare emergency department physicians and tied EmCare’s retention of existing contracts and receipt of new contracts to increase admissions of patients who came to the emergency department.  
 
HMA and EmCare have already resolved their liability to the government related to these allegations.  In September 2018, HMA entered into a civil settlement under which it paid $61.8 million to the government.  HMA also entered into a non-prosecution agreement with the criminal division’s fraud section under which it paid $35 million.  
 
FCA Settlement Based on Loan Forbearance to Referring Physicians
 
On June 3, 2019, the DOJ announced that Rialto Capital Management, LLC, a private equity group, and a former affiliate of Rialto Capital that owned Kentuckiana Medical Center (KMC) agreed to pay $3.6 million to resolve False Claims Act allegations based on kickbacks to referring physicians.  Rialto Capital had acquired KMC through bankruptcy reorganization in 2013, and had subsequently offered partial ownership in KMC’s real estate to certain physicians who had been important referral sources for KMC, but the real estate ownership offers were challenged in the bankruptcy proceedings.
 
Rialto Capital subsequently approved personal loans from KMC to the hospital’s key referral sources.  This settlement resolves allegations that KMC, under the direction of Rialto Capital, repeatedly forbore the physicians from requiring payment of those loans for more than two years after each loan matured and became due in full. The DOJ alleged that KMC’s failure to collect on payment of these loans from key physician referrals sources constituted a form of remuneration prohibited by both the Anti-Kickback Statute and the Stark Law.
 
Settlement Based on Electronic Health Records Incentive Program
 
On May 31, 2019, the DOJ announced that Coffey Health System in Kansas agreed to pay $250,000 to settle claims that they violated the False Claims Act.  The Coffey Health System operates a 25-bed critical access hospital located in Burlington, Kansas.  The DOJ alleged that Coffey Health System falsely attested that it conducted and/or reviewed security risk analyses in accordance with the requirement under the electronic health records (EHR) incentive program in 2012 and 2013.  The DOJ specifically alleged that the Coffey Health System falsely attested that they satisfied the measures of requirements for analyzing and addressing security risk to electronic health records.
 
 

False Claim Act Cases and Settlements Involving Hospital Financial Relationships with Referring Physicians

Hospital financial relationships with referring physicians continues to be a significant area of regulatory scrutiny and targets of whistleblower suits under the False Claims Act through the first half of 2019.  Since January 2019, the U. S. Department of Justice (DOJ) has announced several settlements involving hospitals and decisions in False Claims Act cases involving allegations of Stark Law and Anti-Kickback Statute violations based on physician financial relationships.  
 
False Claims Act Claims Concerning Physician Compensation 
 
On January 28, 2019, the DOJ announced that Avanti Hospitals LLC in Los Angeles and six of its owners will pay $8.1 million to settle claims that they violated the False Claims Act by submitting false claims to the Medicare and Medicaid programs for medical services referred by a physician who received kickbacks and other improper payments from a hospital owned by Avanti Hospitals LLC.  The government alleged that the payments from Avanti Hospitals to a high-referring physician violated the Stark Law and Anti-Kickback Statute.
 
A former CEO of a hospital owned by Avanti Hospitals had filed suit under the whistleblower provisions of the False Claims Act alleging that Avanti provided compensation to a physician engaged as a medical director that (1) exceeded fair market value, and (2) was an attempt to incentivize him to refer patients to an Avanti-owned hospital.  
 
On February 6, 2019, the DOJ announced that Union General Hospital in Georgia agreed to pay $5,000,000 to resolve allegations that it violated the False Claims Act based on improper financial relationships with referring physicians.  The DOJ alleged that the hospital compensated physicians in amounts that were above or inconsistent with fair market value or in a manner that took into account the volume or value of the physician’s referrals.

On March 21, 2019, the United States Department of Justice (DOJ) announced that MedStar Health, a health system in Maryland and Washington, D.C., and two of its hospitals agreed to pay $35 million to settle allegations that they violated the False Claims Act by paying kickbacks to a cardiology group in exchange for patient referrals through a series of professional service agreements, and submitting false claims to Medicare for medically unnecessary cardiology procedures.  
 
The kickback allegations against MedStar were brought by three cardiac surgeons as whistleblowers that the two hospitals owned by MedStar paid kickbacks to referring cardiologists with MidAtlantic Cardiovascular Associates under professional service agreements.  The physician whistleblowers alleged that the compensation paid under the professional service agreements to MidAtlantic Cardiovascular Associates were in return for referrals of cardiovascular procedures and interventional cardiology procedures. According to the whistleblowers’ complaint, some of the services promised and paid for by the MedStar hospitals under the professional service agreements were never provided. 
 
The MedStar settlement also resolves the whistleblowers’ allegations that MedStar submitted false claims to Medicare from January 1, 2006 through December 28, 2012 for medically unnecessary stents performed by a physician under the professional service agreement with MidAtlantic Cardiovascular Associates. In a related case, the DOJ entered into a settlement in 2010 with St. Joseph Medical Center that also resolved allegations that another MidAtlantic Cardiovascular Associates physician performed unnecessary stent procedures.

 On March 25, 2019, the DOJ announced that it had filed a complaint under the whistleblower provisions of the False Claims Act against Wheeling Hospital, Inc., and the hospital’s contracted management consultant based on alleged violations of the Stark Law and Anti-Kickback Statute.  The government claimed that those violations were caused by the hospital’s contracted management consultant and Wheeling Hospital’s CEO Ronald Violo.  

The DOJ alleged that Wheeling Hospital’s compensation to several employed and contacted physicians violated the Stark Law and Anti-Kickback Statute because the compensation was based on the volume or value of the physician’s referrals, exceeded the fair market value of the physician’s services and was not commercially reasonable.  According to the government’s complaint, Wheeling Hospital paid excessive compensation to certain employed physicians, including paying some physicians over $1 million a year which the government asserted was well in excess of accepted industry surveys and standards for physician compensation.  
 
The DOJ also alleged that Wheeling Hospital knew that several employed physician salaries were excessive and that the hospital would lose money on these physicians based on internal hospital documents.  The government further alleged that Wheeling Hospital consistently tracked the amount of downstream revenue generated by referrals from employed physicians and specifically determined that the inflated salaries and significant losses were justified because of the “downstream revenues”.  
 
The complaint filed by the government included the following examples of how Wheeling Hospital overpaid many of its employed physicians:
 
    (1)In 2009, Wheeling Hospital entered into an employment agreement with the highest revenue generating OB/GYN in the hospital’s region. The hospital paid this OB/GYN between $1 million and $1.27 million per year for seven years. Internal document of the hospital provided that the median salary during this same time period for an OB/GYN was $282,645 and the 90th percentile salary was $492,321 according to the MGMA.  The government also cited a comment by the hospital’s COO in an internal document that the salary to this OB/GYN made it “almost impossible for this practice to show a bottom line profit.”
 
    (2)In 2008, Wheeling Hospital entered into an employment agreement with another OB/GYN for a five year term, which included a base salary of $650,000 plus 80% of the practice net income.  The government commented that this physician’s compensation was more than twice the median MGMA salary for an OB/GYN and well in excess of the 90th percentile of MGMA salary data.
 
    (3)In 2011, Wheeling Hospital entered into employment agreements with two radiation oncologists that included base compensation of $1,140,000 and $1,150,000 respectively, and a “bonus to be determined by the CEO” of the hospital.  The government commented that these salaries in 2016 were twice the median MGMA salary ($500,000) and well in excess of the 90th percentile ($781,545).
 
The Wheeling Hospital case is a good example of the need for a hospital to maintain documentation of supporting the fair market value of compensation paid to employed and contracted physicians.
 
Financial Arrangements with Emergency Room Physicians

On April 30, 2019, the DOJ announced that a former CEO of Health Management Associates (HMA) agreed to pay $3.46 million to resolve false billing and kickback allegations.  This settlement resolved allegations that the hospital former CEO caused HMA to knowingly submit false claims to government healthcare programs by admitting patients that could have been treated on a less costly, outpatient basis.  The settlement also resolved allegations that the hospitals CEO caused HMA to pay remuneration to emergency department physicians in return for referrals.
 
This settlement resolves allegations that the former CEO of this hospital chain caused HMA to pressure emergency department physicians to increase inpatient admissions by recommending admission without regard to medical necessity.  The DOJ also alleged that the former hospital chain CEO caused HMA to pay remuneration to EmCare, a physician staffing company, to recommend admission when patients should have been treated on an outpatient basis.   The DOJ also alleged that the former HMA CEO caused HMA to make certain bonus payments to EmCare emergency department physicians and tied EmCare’s retention of existing contracts and receipt of new contracts to increase admissions of patients who came to the emergency department.  
 
HMA and EmCare have already resolved their liability to the government related to these allegations.  In September 2018, HMA entered into a civil settlement under which it paid $61.8 million to the government.  HMA also entered into a non-prosecution agreement with the criminal division’s fraud section under which it paid $35 million.  
 
FCA Settlement Based on Loan Forbearance to Referring Physicians
 
On June 3, 2019, the DOJ announced that Rialto Capital Management, LLC, a private equity group, and a former affiliate of Rialto Capital that owned Kentuckiana Medical Center (KMC) agreed to pay $3.6 million to resolve False Claims Act allegations based on kickbacks to referring physicians.  Rialto Capital had acquired KMC through bankruptcy reorganization in 2013, and had subsequently offered partial ownership in KMC’s real estate to certain physicians who had been important referral sources for KMC, but the real estate ownership offers were challenged in the bankruptcy proceedings.
 
Rialto Capital subsequently approved personal loans from KMC to the hospital’s key referral sources.  This settlement resolves allegations that KMC, under the direction of Rialto Capital, repeatedly forbore the physicians from requiring payment of those loans for more than two years after each loan matured and became due in full. The DOJ alleged that KMC’s failure to collect on payment of these loans from key physician referrals sources constituted a form of remuneration prohibited by both the Anti-Kickback Statute and the Stark Law.
 
Settlement Based on Electronic Health Records Incentive Program
 
On May 31, 2019, the DOJ announced that Coffey Health System in Kansas agreed to pay $250,000 to settle claims that they violated the False Claims Act.  The Coffey Health System operates a 25-bed critical access hospital located in Burlington, Kansas.  The DOJ alleged that Coffey Health System falsely attested that it conducted and/or reviewed security risk analyses in accordance with the requirement under the electronic health records (EHR) incentive program in 2012 and 2013.  The DOJ specifically alleged that the Coffey Health System falsely attested that they satisfied the measures of requirements for analyzing and addressing security risk to electronic health records.
 
 

False Claim Act Cases and Settlements Involving Hospital Financial Relationships with Referring Physicians

Hospital financial relationships with referring physicians continues to be a significant area of regulatory scrutiny and targets of whistleblower suits under the False Claims Act through the first half of 2019.  Since January 2019, the U. S. Department of Justice (DOJ) has announced several settlements involving hospitals and decisions in False Claims Act cases involving allegations of Stark Law and Anti-Kickback Statute violations based on physician financial relationships.  
 
False Claims Act Claims Concerning Physician Compensation 
 
On January 28, 2019, the DOJ announced that Avanti Hospitals LLC in Los Angeles and six of its owners will pay $8.1 million to settle claims that they violated the False Claims Act by submitting false claims to the Medicare and Medicaid programs for medical services referred by a physician who received kickbacks and other improper payments from a hospital owned by Avanti Hospitals LLC.  The government alleged that the payments from Avanti Hospitals to a high-referring physician violated the Stark Law and Anti-Kickback Statute.
 
A former CEO of a hospital owned by Avanti Hospitals had filed suit under the whistleblower provisions of the False Claims Act alleging that Avanti provided compensation to a physician engaged as a medical director that (1) exceeded fair market value, and (2) was an attempt to incentivize him to refer patients to an Avanti-owned hospital.  
 
On February 6, 2019, the DOJ announced that Union General Hospital in Georgia agreed to pay $5,000,000 to resolve allegations that it violated the False Claims Act based on improper financial relationships with referring physicians.  The DOJ alleged that the hospital compensated physicians in amounts that were above or inconsistent with fair market value or in a manner that took into account the volume or value of the physician’s referrals.

On March 21, 2019, the United States Department of Justice (DOJ) announced that MedStar Health, a health system in Maryland and Washington, D.C., and two of its hospitals agreed to pay $35 million to settle allegations that they violated the False Claims Act by paying kickbacks to a cardiology group in exchange for patient referrals through a series of professional service agreements, and submitting false claims to Medicare for medically unnecessary cardiology procedures.  
 
The kickback allegations against MedStar were brought by three cardiac surgeons as whistleblowers that the two hospitals owned by MedStar paid kickbacks to referring cardiologists with MidAtlantic Cardiovascular Associates under professional service agreements.  The physician whistleblowers alleged that the compensation paid under the professional service agreements to MidAtlantic Cardiovascular Associates were in return for referrals of cardiovascular procedures and interventional cardiology procedures. According to the whistleblowers’ complaint, some of the services promised and paid for by the MedStar hospitals under the professional service agreements were never provided. 
 
The MedStar settlement also resolves the whistleblowers’ allegations that MedStar submitted false claims to Medicare from January 1, 2006 through December 28, 2012 for medically unnecessary stents performed by a physician under the professional service agreement with MidAtlantic Cardiovascular Associates. In a related case, the DOJ entered into a settlement in 2010 with St. Joseph Medical Center that also resolved allegations that another MidAtlantic Cardiovascular Associates physician performed unnecessary stent procedures.

 On March 25, 2019, the DOJ announced that it had filed a complaint under the whistleblower provisions of the False Claims Act against Wheeling Hospital, Inc., and the hospital’s contracted management consultant based on alleged violations of the Stark Law and Anti-Kickback Statute.  The government claimed that those violations were caused by the hospital’s contracted management consultant and Wheeling Hospital’s CEO Ronald Violo.  

The DOJ alleged that Wheeling Hospital’s compensation to several employed and contacted physicians violated the Stark Law and Anti-Kickback Statute because the compensation was based on the volume or value of the physician’s referrals, exceeded the fair market value of the physician’s services and was not commercially reasonable.  According to the government’s complaint, Wheeling Hospital paid excessive compensation to certain employed physicians, including paying some physicians over $1 million a year which the government asserted was well in excess of accepted industry surveys and standards for physician compensation.  
 
The DOJ also alleged that Wheeling Hospital knew that several employed physician salaries were excessive and that the hospital would lose money on these physicians based on internal hospital documents.  The government further alleged that Wheeling Hospital consistently tracked the amount of downstream revenue generated by referrals from employed physicians and specifically determined that the inflated salaries and significant losses were justified because of the “downstream revenues”.  
 
The complaint filed by the government included the following examples of how Wheeling Hospital overpaid many of its employed physicians:
 
    (1)In 2009, Wheeling Hospital entered into an employment agreement with the highest revenue generating OB/GYN in the hospital’s region. The hospital paid this OB/GYN between $1 million and $1.27 million per year for seven years. Internal document of the hospital provided that the median salary during this same time period for an OB/GYN was $282,645 and the 90th percentile salary was $492,321 according to the MGMA.  The government also cited a comment by the hospital’s COO in an internal document that the salary to this OB/GYN made it “almost impossible for this practice to show a bottom line profit.”
 
    (2)In 2008, Wheeling Hospital entered into an employment agreement with another OB/GYN for a five year term, which included a base salary of $650,000 plus 80% of the practice net income.  The government commented that this physician’s compensation was more than twice the median MGMA salary for an OB/GYN and well in excess of the 90th percentile of MGMA salary data.
 
    (3)In 2011, Wheeling Hospital entered into employment agreements with two radiation oncologists that included base compensation of $1,140,000 and $1,150,000 respectively, and a “bonus to be determined by the CEO” of the hospital.  The government commented that these salaries in 2016 were twice the median MGMA salary ($500,000) and well in excess of the 90th percentile ($781,545).
 
The Wheeling Hospital case is a good example of the need for a hospital to maintain documentation of supporting the fair market value of compensation paid to employed and contracted physicians.
 
Financial Arrangements with Emergency Room Physicians

On April 30, 2019, the DOJ announced that a former CEO of Health Management Associates (HMA) agreed to pay $3.46 million to resolve false billing and kickback allegations.  This settlement resolved allegations that the hospital former CEO caused HMA to knowingly submit false claims to government healthcare programs by admitting patients that could have been treated on a less costly, outpatient basis.  The settlement also resolved allegations that the hospitals CEO caused HMA to pay remuneration to emergency department physicians in return for referrals.
 
This settlement resolves allegations that the former CEO of this hospital chain caused HMA to pressure emergency department physicians to increase inpatient admissions by recommending admission without regard to medical necessity.  The DOJ also alleged that the former hospital chain CEO caused HMA to pay remuneration to EmCare, a physician staffing company, to recommend admission when patients should have been treated on an outpatient basis.   The DOJ also alleged that the former HMA CEO caused HMA to make certain bonus payments to EmCare emergency department physicians and tied EmCare’s retention of existing contracts and receipt of new contracts to increase admissions of patients who came to the emergency department.  
 
HMA and EmCare have already resolved their liability to the government related to these allegations.  In September 2018, HMA entered into a civil settlement under which it paid $61.8 million to the government.  HMA also entered into a non-prosecution agreement with the criminal division’s fraud section under which it paid $35 million.  
 
FCA Settlement Based on Loan Forbearance to Referring Physicians
 
On June 3, 2019, the DOJ announced that Rialto Capital Management, LLC, a private equity group, and a former affiliate of Rialto Capital that owned Kentuckiana Medical Center (KMC) agreed to pay $3.6 million to resolve False Claims Act allegations based on kickbacks to referring physicians.  Rialto Capital had acquired KMC through bankruptcy reorganization in 2013, and had subsequently offered partial ownership in KMC’s real estate to certain physicians who had been important referral sources for KMC, but the real estate ownership offers were challenged in the bankruptcy proceedings.
 
Rialto Capital subsequently approved personal loans from KMC to the hospital’s key referral sources.  This settlement resolves allegations that KMC, under the direction of Rialto Capital, repeatedly forbore the physicians from requiring payment of those loans for more than two years after each loan matured and became due in full. The DOJ alleged that KMC’s failure to collect on payment of these loans from key physician referrals sources constituted a form of remuneration prohibited by both the Anti-Kickback Statute and the Stark Law.
 
Settlement Based on Electronic Health Records Incentive Program
 
On May 31, 2019, the DOJ announced that Coffey Health System in Kansas agreed to pay $250,000 to settle claims that they violated the False Claims Act.  The Coffey Health System operates a 25-bed critical access hospital located in Burlington, Kansas.  The DOJ alleged that Coffey Health System falsely attested that it conducted and/or reviewed security risk analyses in accordance with the requirement under the electronic health records (EHR) incentive program in 2012 and 2013.  The DOJ specifically alleged that the Coffey Health System falsely attested that they satisfied the measures of requirements for analyzing and addressing security risk to electronic health records.
 
 

False Claim Act Cases and Settlements Involving Hospital Financial Relationships with Referring Physicians

Hospital financial relationships with referring physicians continues to be a significant area of regulatory scrutiny and targets of whistleblower suits under the False Claims Act through the first half of 2019.  Since January 2019, the U. S. Department of Justice (DOJ) has announced several settlements involving hospitals and decisions in False Claims Act cases involving allegations of Stark Law and Anti-Kickback Statute violations based on physician financial relationships.  
 
False Claims Act Claims Concerning Physician Compensation 
 
On January 28, 2019, the DOJ announced that Avanti Hospitals LLC in Los Angeles and six of its owners will pay $8.1 million to settle claims that they violated the False Claims Act by submitting false claims to the Medicare and Medicaid programs for medical services referred by a physician who received kickbacks and other improper payments from a hospital owned by Avanti Hospitals LLC.  The government alleged that the payments from Avanti Hospitals to a high-referring physician violated the Stark Law and Anti-Kickback Statute.
 
A former CEO of a hospital owned by Avanti Hospitals had filed suit under the whistleblower provisions of the False Claims Act alleging that Avanti provided compensation to a physician engaged as a medical director that (1) exceeded fair market value, and (2) was an attempt to incentivize him to refer patients to an Avanti-owned hospital.  
 
On February 6, 2019, the DOJ announced that Union General Hospital in Georgia agreed to pay $5,000,000 to resolve allegations that it violated the False Claims Act based on improper financial relationships with referring physicians.  The DOJ alleged that the hospital compensated physicians in amounts that were above or inconsistent with fair market value or in a manner that took into account the volume or value of the physician’s referrals.

On March 21, 2019, the United States Department of Justice (DOJ) announced that MedStar Health, a health system in Maryland and Washington, D.C., and two of its hospitals agreed to pay $35 million to settle allegations that they violated the False Claims Act by paying kickbacks to a cardiology group in exchange for patient referrals through a series of professional service agreements, and submitting false claims to Medicare for medically unnecessary cardiology procedures.  
 
The kickback allegations against MedStar were brought by three cardiac surgeons as whistleblowers that the two hospitals owned by MedStar paid kickbacks to referring cardiologists with MidAtlantic Cardiovascular Associates under professional service agreements.  The physician whistleblowers alleged that the compensation paid under the professional service agreements to MidAtlantic Cardiovascular Associates were in return for referrals of cardiovascular procedures and interventional cardiology procedures. According to the whistleblowers’ complaint, some of the services promised and paid for by the MedStar hospitals under the professional service agreements were never provided. 
 
The MedStar settlement also resolves the whistleblowers’ allegations that MedStar submitted false claims to Medicare from January 1, 2006 through December 28, 2012 for medically unnecessary stents performed by a physician under the professional service agreement with MidAtlantic Cardiovascular Associates. In a related case, the DOJ entered into a settlement in 2010 with St. Joseph Medical Center that also resolved allegations that another MidAtlantic Cardiovascular Associates physician performed unnecessary stent procedures.

 On March 25, 2019, the DOJ announced that it had filed a complaint under the whistleblower provisions of the False Claims Act against Wheeling Hospital, Inc., and the hospital’s contracted management consultant based on alleged violations of the Stark Law and Anti-Kickback Statute.  The government claimed that those violations were caused by the hospital’s contracted management consultant and Wheeling Hospital’s CEO Ronald Violo.  

The DOJ alleged that Wheeling Hospital’s compensation to several employed and contacted physicians violated the Stark Law and Anti-Kickback Statute because the compensation was based on the volume or value of the physician’s referrals, exceeded the fair market value of the physician’s services and was not commercially reasonable.  According to the government’s complaint, Wheeling Hospital paid excessive compensation to certain employed physicians, including paying some physicians over $1 million a year which the government asserted was well in excess of accepted industry surveys and standards for physician compensation.  
 
The DOJ also alleged that Wheeling Hospital knew that several employed physician salaries were excessive and that the hospital would lose money on these physicians based on internal hospital documents.  The government further alleged that Wheeling Hospital consistently tracked the amount of downstream revenue generated by referrals from employed physicians and specifically determined that the inflated salaries and significant losses were justified because of the “downstream revenues”.  
 
The complaint filed by the government included the following examples of how Wheeling Hospital overpaid many of its employed physicians:
 
    (1)In 2009, Wheeling Hospital entered into an employment agreement with the highest revenue generating OB/GYN in the hospital’s region. The hospital paid this OB/GYN between $1 million and $1.27 million per year for seven years. Internal document of the hospital provided that the median salary during this same time period for an OB/GYN was $282,645 and the 90th percentile salary was $492,321 according to the MGMA.  The government also cited a comment by the hospital’s COO in an internal document that the salary to this OB/GYN made it “almost impossible for this practice to show a bottom line profit.”
 
    (2)In 2008, Wheeling Hospital entered into an employment agreement with another OB/GYN for a five year term, which included a base salary of $650,000 plus 80% of the practice net income.  The government commented that this physician’s compensation was more than twice the median MGMA salary for an OB/GYN and well in excess of the 90th percentile of MGMA salary data.
 
    (3)In 2011, Wheeling Hospital entered into employment agreements with two radiation oncologists that included base compensation of $1,140,000 and $1,150,000 respectively, and a “bonus to be determined by the CEO” of the hospital.  The government commented that these salaries in 2016 were twice the median MGMA salary ($500,000) and well in excess of the 90th percentile ($781,545).
 
The Wheeling Hospital case is a good example of the need for a hospital to maintain documentation of supporting the fair market value of compensation paid to employed and contracted physicians.
 
Financial Arrangements with Emergency Room Physicians

On April 30, 2019, the DOJ announced that a former CEO of Health Management Associates (HMA) agreed to pay $3.46 million to resolve false billing and kickback allegations.  This settlement resolved allegations that the hospital former CEO caused HMA to knowingly submit false claims to government healthcare programs by admitting patients that could have been treated on a less costly, outpatient basis.  The settlement also resolved allegations that the hospitals CEO caused HMA to pay remuneration to emergency department physicians in return for referrals.
 
This settlement resolves allegations that the former CEO of this hospital chain caused HMA to pressure emergency department physicians to increase inpatient admissions by recommending admission without regard to medical necessity.  The DOJ also alleged that the former hospital chain CEO caused HMA to pay remuneration to EmCare, a physician staffing company, to recommend admission when patients should have been treated on an outpatient basis.   The DOJ also alleged that the former HMA CEO caused HMA to make certain bonus payments to EmCare emergency department physicians and tied EmCare’s retention of existing contracts and receipt of new contracts to increase admissions of patients who came to the emergency department.  
 
HMA and EmCare have already resolved their liability to the government related to these allegations.  In September 2018, HMA entered into a civil settlement under which it paid $61.8 million to the government.  HMA also entered into a non-prosecution agreement with the criminal division’s fraud section under which it paid $35 million.  
 
FCA Settlement Based on Loan Forbearance to Referring Physicians
 
On June 3, 2019, the DOJ announced that Rialto Capital Management, LLC, a private equity group, and a former affiliate of Rialto Capital that owned Kentuckiana Medical Center (KMC) agreed to pay $3.6 million to resolve False Claims Act allegations based on kickbacks to referring physicians.  Rialto Capital had acquired KMC through bankruptcy reorganization in 2013, and had subsequently offered partial ownership in KMC’s real estate to certain physicians who had been important referral sources for KMC, but the real estate ownership offers were challenged in the bankruptcy proceedings.
 
Rialto Capital subsequently approved personal loans from KMC to the hospital’s key referral sources.  This settlement resolves allegations that KMC, under the direction of Rialto Capital, repeatedly forbore the physicians from requiring payment of those loans for more than two years after each loan matured and became due in full. The DOJ alleged that KMC’s failure to collect on payment of these loans from key physician referrals sources constituted a form of remuneration prohibited by both the Anti-Kickback Statute and the Stark Law.
 
Settlement Based on Electronic Health Records Incentive Program
 
On May 31, 2019, the DOJ announced that Coffey Health System in Kansas agreed to pay $250,000 to settle claims that they violated the False Claims Act.  The Coffey Health System operates a 25-bed critical access hospital located in Burlington, Kansas.  The DOJ alleged that Coffey Health System falsely attested that it conducted and/or reviewed security risk analyses in accordance with the requirement under the electronic health records (EHR) incentive program in 2012 and 2013.  The DOJ specifically alleged that the Coffey Health System falsely attested that they satisfied the measures of requirements for analyzing and addressing security risk to electronic health records.
 
 
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