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Medical provider accused of kickbacks, settles for $3M

Two anesthesia providers and two orthopedic surgery providers agreed to settle with the Department of Justice over claims of illegal kickbacks and submission of false claims to Medicare.

The investigation into the claims was the result of a whistleblower case. The False Claims Act includes a provision which allows employees to voice concerns about wrongdoing without fear of professional retaliation. A former administrator within one of the practices filed suit on behalf of the United States based on this qui tam provision of the False Calms Act. In exchange for bringing forward the suit, the private citizen stands to receive a portion of the settlement.

The Department of Justice (DOJ) used evidence gathered from this investigation to accuse the medical provider of violations of the Anti-Kickback Statute and False Claims Act. This evidence included the alleged placement of a medical director at one of the centers free of charge in exchange for an increased number of procedures completed at that center. The DOJ also alleges the group filed Medicare claims to cover the cost of prescription medications purchased outside of the United States. The DOJ claims these medications were not approved by the United States Food and Drug Administration. Ultimately, the submission of these claims are allegedly a violation of the False Claims Act.

After negotiations, the medical providers chose to agree to a settlement as opposed to move forward with litigation. The settlement includes a payment of $3.2 million.

The settlement is not an admission of guilt. The allegations remain just that, allegations. The medical provider’s decision to move forward with a settlement does not substantiate the accusations.

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