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Ear, nose and throat specialists pay $9 mill to settle FCA claim

An ear, nose and throat (ENT) practice recently agreed to pay the government along with local state authorities over $9 million to settle claims they violated the federal False Claims Act (FCA) and state regulations.

The allegations involved an improper financial relationship. The government pursues such allegations fiercely, because it believes the relationship can result in compromising the physician’s medical judgment and endanger the public’s trust. It has various forms of punishment it can use if successful, including financial penalties and potential imprisonment.

In this case, the government used two avenues to build their claim.

Avenue #1: Whistleblower

First, a former ENT physician filed a lawsuit under the qui tam provision of the False Claims Act (FCA). This provision allows for a whistleblower lawsuit — a lawsuit where an individual will file a claim of wrongdoing against the government on the government’s behalf.  

The physician will receive a portion of the award in exchange for filing the suit.

Avenue #2: Self disclosure

The second avenue involves some level of self-disclosure. According to the Department of Justice (DOJ), the hospital involved in the case had also agreed to self-disclose information about physicians receiving financial incentives to refer patients to their facility.

The hospital disclosed the following violations:

  • Compensation for physicians based on referrals for in-office lab work.
  • Financial arrangements between the hospital and physicians that were kept off official records.
  • Trauma call coverage arrangement benefits that did not fall within an exception to the Stark Law.

As part of the agreement, the hospital worked with the government to resolve these issues.

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