On May 1, 2013, the Department of Justice announced a settlement with two Montana hospitals that added $3.95 million to its recoveries under the False Claims Act. According to the announcement, with this additional recovery, the Department of Justice has used the False Claims Act to recover more than $14.2 billion in federal healthcare payments since January, 2009.
Once again, allegations of hospital-physician financial relationships that violated the Stark law prohibition against self-referral were the stated basis for the allegations of False Claims Act liability. In this case, according to the announcement, it was alleged that the hospitals paid incentive compensation to certain physicians in a manner that took into consideration the value or volume of the referrals by the physicians to the hospital by improperly including certain designated health services in the formula for calculating physician incentive compensation.
This situation was voluntarily disclosed by the hospitals. In this regard, an OIG representative was quoted as commenting:
“There is an expectation that corporations providing services to Medicare and Medicaid beneficiaries adhere to the provisions of the Stark Law. I applaud St. Vincent Healthcare and Holy Rosary Healthcare for recognizing their potential liability in this matter and making a disclosure”
As part of its on-going quarterly lunch time webinar series, the Ogden Murphy Wallace Healthcare Practice Group will provide a presentation on self-disclosure options and avoidance of state and federal false claims act liability in its June 4, 2013 webinar (to register click here). If you have questions regarding self-disclosure and overpayments in general please contact Greg Montgomery.