US lab kickback settlement
Alabama-based Infirmary Health System (IHS), Infirmary Medical Clinics (IMC), Diagnostic Physicians Group P.C. (DPG) and two clinics run by IMC have agreed to pay $24.5 million to settle allegations they violated the Stark Law and Anti-Kickback Statute by engaging in a scheme to compensate physicians for laboratory and radiology referrals.
Dr. Christian Heesch, a physician formerly employed by DPG, filed the whistleblower suit in 2011, and the federal government elected to intervene in July 2013.
The government alleged IHS, through its subsidiaries and clinics, paid physician-owned DPG “a percentage of collections on items and services performed or referred by DPG physicians” to IHS-affiliated clinics that performed clinical laboratory and diagnostic imaging tests from 2005 to 2011. DPG then compensated individual physicians for their referrals.
The government stated IHS did this so as to:
…keep DPG and its physicians affiliated with [IHS], to prevent them from affiliating with competitors, and to induce DPG physicians to refer federal health care business to IHS subsidiaries…in violation of the Anti-Kickback Statute and the FCA.
According to a 2013 article from AL.com, it was also alleged federal health programs paid at least $521.6 million in false claims between 2004 and 2010, and physicians at DPG received more than $18.6 million in bonuses during the same time frame.
DPG deliberated its compliance with the Stark Law beginning as early as 2002, and again in 2007 and 2008, according to court records. In June 2010, a meeting took place in which DPG’s attorney told both DPG executives and IMC employees their arrangement likely violated the Stark Law, but despite this, no changes were made.
Dr. Heesch will receive $4.41 million of the settlement.