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U.S. hospital chain to pay over $260M to settle fraud charges

Allegations of kickback violations can lead to more than just harsh civil penalties, they can also lead to criminal charges. That was the case when the government accused a national hospital chain of various forms of healthcare fraud, including kickback violations.

Charges explained: Government investigation results in civil and criminal penalties

The government accused the national hospital chain of intentionally billing the government for programs and services not actually provided to patients as well as the use of illegal kickbacks to physicians to encourage patient referrals. The government states the hospitals encouraged physicians to admit emergency room patients, regardless of medical necessity, to allegedly increase the rate of Medicare and Medicaid reimbursements.

Such practices are illegal. The anti-kickback statue and Stark Law make it illegal for physicians to benefit from certain patient referrals. Lawmakers passed this law to help better ensure physicians focus on the health of their patients as opposed to the potential for financial gain.

Instead of continuing with a trial, the organization chose to settle the charges with the government. The settlement includes a payment of $216 million to settle claims of false payments from Medicare, Medicaid and other government benefit programs. The government did require the payment of additional fees and penalties, resulting in a final agreement that will cost the organization over $260 million.

Moving forward: Organization looks to the future and attempts to put investigation in the past

The current chairman and CEO of the organization noted the investigation was already underway prior to the acquisition of the group. He stated the group is pleased to reach a settlement and strives to comply with the current “complex regulatory environment” and focus on operating the medical organization with integrity and meeting expected high standards of conduct.

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