Physician-Owned Hospital Agrees to Resolve Its Civil and Criminal Liability for Benefiting from Illegal Kickbacks to Physicians
|U.S. Attorney’s Office September 12, 2013|
DALLAS—Forest Park Medical Center LLC (FPMC), a North Texas physician-owned hospital, paid over $258,000 to settle allegations that it violated the civil False Claims Act, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas. The United States contends that a FPMC representative paid illegal kickbacks to area physicians to obtain referrals for Tricare patients, a federally funded health care program, in violation of the federal law, between 2008 and 2012. Based on the same allegations, FPMC entered into a non-prosecution agreement with the United States and agreed to certain conditions, as well as a federally imposed monitor for not more than 24 months. FPMC fully cooperated with the investigation and, by settling civilly and criminally, did not admit any wrong-doing or liability.
FPMC, located in Dallas, did not seek reimbursement from any federal sources such as Medicare and Medicaid but only commercial payors and self-pay. Federal and state law usually limits the amount of compensation paid to physicians and their ability to refer certain patients under federally insured programs. Because FPMC believed it did not accept federal funds, its representatives, to the benefit of FPMC’s behalf, offered and paid excessive remuneration and other things of value to actual and potential referring physicians or others, including amounts for “marketing” or “advertising.” Payments also were made in the form of cash and giftcards/coupons for luxury items. The United States alleges such payments were made to obtain federal health care program patients, such as TRICARE, a program for military retirees and their dependents. The United States contends such payments were unlawful kickbacks for the referral of federal health care program patients in violation of the federal Anti-Kickback Statute between January 1, 2008 and October 31, 2012. The United States initiated the investigation in response to numerous complaints.
In the non-prosecution agreement, FPMC acknowledged the United States has sufficient evidence to seek an indictment for the offering and payment of illegal kickbacks in violation of federal law. In return for the non-prosecution of the hospital, FPMC selected and retained an independent monitor to address any compliance issues and the United States’ concerns regarding the allegations of illegal conduct. The monitor will be in place for not more than 24 months and will review and evaluate inpatient and outpatient claims submitted to all payors, not just federal programs. FPMC also agreed to cooperate with the United States’ ongoing investigation into certain individuals. No persons were released under the civil and criminal agreements. The United States’ investigation remains ongoing.
U.S. Attorney Saldaña praised the efforts of the investigating agencies, including the Defense Criminal Investigative Services; FBI; Department of Labor, EBSA; Office of Inspector General of the Office of Personnel Management; and FDA-CI.
“This civil and criminal resolution spares the honest employees and investors of FPMC, while holding the hospital accountable for allowing an environment where its representatives paid illegal kickbacks for referrals,” said U.S. Attorney Saldaña. “This outcome imposes well-deserved measures that we expect will ensure FPMC becomes fully compliant with federal and private health care program requirements. Whether physician-owned, not-for-profit, or for-profit, the Department of Justice expects and requires all providers to be trustworthy and abide by the law,” Saldaña continued.
The case was handled by Assistant U.S. Attorneys Sean McKenna, Errin Martin, and Lynette Wilson and Special Assistant U.S. Attorney Glenn Harrison.