Fifteen Texas doctors have agreed to pay a total of $2,831,280 to resolve False Claims Act allegations involving illegal kickbacks in violation of the Anti-Kickback Statute and Stark Law, and to cooperate with the Department of Justice’s investigations of and litigation against other parties.
The settlements resolve allegations that fifteen Texas doctors violated the Anti-Kickback Statute and the Stark Law by receiving thousands of dollars in remuneration from nine management service organizations (MSOs) in exchange for ordering laboratory tests from a hospital and two diagnostic companies. The hospital allegedly funded the remuneration to certain doctors, in the form of volume-based commissions paid to independent contractor recruiters, who used MSOs to pay numerous doctors for their referrals. The MSO payments to the doctors were allegedly disguised as investment returns but in fact were based on, and offered in exchange for, the doctors’ referrals.
As part of their settlements, the fifteen physicians have agreed to cooperate with the Department of Justice’s investigations of and litigation against other parties involved in the alleged violations of law.
The CEOs of the hospital and diagnostic companies, and others, are defendants in a separate False Claims Act lawsuit in which the United States filed an amended complaint in May 2022. The civil settlements were the result of a coordinated effort between the US Attorney’s Office for the Eastern District of Texas and the Civil Division’s Commercial Litigation Branch, Fraud Section, with assistance from HHS-OIG, DCIS, and VA-OIG. As a result of its efforts, the United States has recovered over $32 million relating to conduct involving the companies, including False Claims Act settlements with thirty-three physicians, two healthcare executives, and one laboratory.
Issue:
The Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid, and other federally funded programs. The Stark Law forbids a hospital or laboratory from billing Medicare for certain services referred by physicians that have a financial relationship with the hospital or laboratory. The Anti-Kickback Statute and the Stark Law are intended to ensure that medical providers’ judgments are not compromised by improper financial incentives and are instead based on the best interests of their patients.
Discussion Points:
- Review policies and procedures for preventing and reporting an anti-kickback violation. Update your policies and procedures as needed.
- Train all staff on federal and state anti-kickback statutes and what can be considered a kickback. Include information on how to report concerns and suspected violations, and make sure staff know that prompt reporting is mandatory. Document that the trainings occurred and place in each employee’s education file.
- Periodically audit staff understanding to ensure that they are aware of what should be done if they suspect an illegal kickback has occurred, whether intentionally or unintentionally. Conduct audits of documentation and billing routinely to prevent and detect errors before they progress to a false claim.
