In a settlement announced late last week by the U.S. Attorney for the Northern District of Texas, radiation therapy center operator SightLine Health LLC (SightLine), Integrated Oncology Network Holdings LLC (ION), which acquired SightLine in 2011, and a number of leasing and holding companies agreed to pay up to $11.5 million to resolve allegations that the companies violated the Anti-Kickback Statute and the False Claims Act.  SightLine has clinics nationwide and offers intensity-modulated radiation therapy – a treatment for prostate cancer than can cost up to $30,000 for a full course of therapy sessions.

The allegations, initially contained in a complaint filed by a whistleblower and later taken over by the government, claim that SightLine created a complex system of business ventures and holding companies designed to entice physicians to profit from their referral of patients to SightLine for cancer treatment. SightLine is alleged to have strategically approached physicians in cities where it had treatment centers with offers to invest in ventures that leased space to the clinics.  Initial physician investments often approached $100,000, but each physician received a share of the profits from the center (up to 80 percent), thus providing a strong incentive for the physicians to refer patients to SightLine.

“Investment arrangements that are structured to improperly compensate physicians for referrals can encourage physicians to make decisions based on financial gain rather than the best interest of their patients,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division.  “The Department of Justice is committed to preventing illegal inducements, in whatever form, that undermine the integrity of our public health programs.”

In addition to the $11.5 million payment, SightLine, ION, and their related holding companies entered into a Corporate Integrity Agreement with the Department of Health and Human Services – Office of Inspector General.  The 5-year agreement includes internal and external monitoring of the relationships between the ION and SightLine entities and referring physician investors.

“Companies seeking to boost profits by paying physicians kickbacks for patient referrals undermine impartial medical judgment and increase health care costs for everyone,” said Chief Counsel to the HHS Inspector General Gregory Demske.  “We will continue to investigate such illegal, wasteful business arrangements in order to protect government health programs and the patients served by them.”

Despite the settlement, the matter is not yet concluded as a number of individuals named in the government’s suit have declined to settle, including the former CEO of SightLine Health and several urologists who invested in the leasing companies.  The investigation into those individuals continues.

The Pharmacy and Health Law team at FisherBroyles offers complete compliance reviews for all types of healthcare entities across the United States. We welcome your questions. Please contact any of the following attorneys for assistance.
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