Dive Brief:
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Mercy Hospital Springfield, formerly known at St. John’s Regional Health Center, and Mercy Clinic Springfield Communities, formerly known as St. John’s Clinic, agreed to pay $34 million to settle allegations that they violated the False Claims Act. The U.S. Department of Justice (DOJ) claimed the facilities engaged in “improper financial relationships with referring physicians.”
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The facilities reportedly submitted false claims to Medicare for chemotherapy services to patients referred by oncologists “whose compensation was based in part on a formula that improperly took into account the value of their referrals of patients to the infusion center,” DOJ reported.
- The agency said the settlement “should deter similar conduct in the future and help make healthcare more affordable.”
Dive Insight:
In announcing the settlement, Acting Assistant Attorney General Chad A. Readler of the DOJ's Civil Division said rewarding physicians for referring patients to hospitals “can affect their medical judgment, resulting in overutilization of services that drives up healthcare costs for everyone.”
The case began when a whistleblower, Dr. Viran Roger Holden, a physician who was employed by one of the facilities, filed a lawsuit. Holden will receive $5.44 million from the settlement.
This is just the latest fraud case involving the DOJ and state investigators. Over just the past month: the federal agency sued UnitedHealth Group in a $1 billion Medicare overbilling case; two Houston brothers who owned an ambulance company were sentenced to prison and have to pay $2.3 million for healthcare fraud; and the state of California charged 26 doctors, pharmacists and business owners in a $40 million fraudulent medical billing and kickback operation.