Aurora Health Care, Inc. Agrees to Pay $12 Million to Settle Allegations Under the False Claims Act and the Stark Law

United States Attorney Matthew D. Krueger announced today that Aurora Health Care, Inc. (“Aurora”) has agreed to pay $12 million to the United States and State of Wisconsin to settle allegations that Aurora violated the False Claims Act by submitting claims to Medicare and Medicaid in violation of the Stark Law.  Aurora and its affiliates (“Aurora”) are part of Advocate Aurora Health, Inc., an integrated health care system that serves patients throughout eastern Wisconsin, Illinois, and the upper peninsula of Michigan. 

The Stark Law provides that the government will not pay for designated health services ordered by physicians who have improper financial relationships with entities to whom they refer patients because such financial relationships can compromise the physicians’ professional judgment.  The False Claims Act prohibits an entity from knowingly submitting claims for payment for such services. 

The United States and State of Wisconsin allege that, during certain periods from 2008 to 2012, Aurora entered into compensation arrangements with two physicians that did not comply with the Stark Law because the compensation arrangements were not commercially reasonable and because the compensation exceeded the fair market value of the physicians’ services, took into account the physicians’ anticipated referrals, and was not for identifiable services.  The United States and the State of Wisconsin allege that Aurora nonetheless submitted claims for services ordered by those physicians to Medicare and Medicaid, in violation of the False Claims Act. 

“Each year, Federal and State governments spend over a trillion dollars on healthcare programs like Medicare and Medicaid,” said United States Attorney Krueger.  “This settlement reflects the U.S. Department of Justice’s commitment to using all available legal tools to ensure those healthcare dollars are spent wisely.”     

 “Healthcare entities need to ensure that compensation arrangements with physicians are clear and appropriate,” said Lamont Pugh III, Special Agent in Charge, U.S. Department of Health & Human Services, Office of Inspector General – Chicago Region (“HHS OIG”).  “The practice of self-referring presents a conflict of interest and can lead to the overutilization of services which ultimately drives up the cost of health care.  The OIG will continue to examine and investigate those relationships that violate federal statutes in an effort to protect vital taxpayer dollars.”

“This $12 million dollar settlement demonstrates how these violations have a significant and direct economic impact on the health care industry,” said FBI Special Agent-in-Charge Justin Tolomeo.  “Our priority is to protect consumers and hold accountable those in the healthcare system who misuse the Medicare and Medicaid programs.”

The investigation that discovered the allegedly improper compensation arrangements resulted from a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act.  Consequently, the whistleblowers will recover a share of the settlement amount.  The whistleblowers’ complaint alleged different claims that are not the basis for the settlement agreement being announced today.  The United States and the State of Wisconsin is not intervening in the whistleblowers’ lawsuit to pursue those claims.  As part of the settlement, the United States, the State of Wisconsin, and the whistleblowers will ask the district court to dismiss the qui tam complaint. 

The investigation was assisted by the FBI, HHS OIG, the Defense Criminal Investigative Service, and the Wisconsin Department of Justice Medicaid Fraud Control & Elder Abuse Unit.  The settlement agreement states allegations only; Aurora does not admit liability for the allegations. 

# # # # #

For Additional Information Contact:

Public Information Officer Dean Puschnig 414-297-1700