One week ago the North Broward Hospital District (Broward Health) agreed to pay a record $69.5 million to the State of Florida to settle allegations that it violated the False Claims Act, the federal Anti-Kickback Statute and the Stark Law. That record didn’t last long, however, as the US Justice Department (DOJ) announced on Monday that Adventist Health System (Adventist) has agreed to pay $118.7 million to four states and the federal government to settle whistleblower claims filed by three former Adventist employees. The Adventist settlement is now the largest healthcare fraud settlement ever made, though how long this record lasts remains to be seen – FCA settlement records seem to be falling with alarming regularity as the DOJ continues to pursue cases of healthcare fraud with extreme vigor.

The whistleblowers in the Adventist case, a hospital system with facilities in 10 states, alleged that Adventist paid doctors for referrals in Florida, North Carolina, Tennessee, and Texas. In addition to compensating doctors excessively for referrals, and in one case, paying for leases on both a BMW and a Mustang for a physician, Adventist was accused of unbundling services and submitting them as separate claims in order to get larger reimbursements from the government and submitting claims for services that were not documented in patient files.

In an oft-repeated refrain from numerous federal attorneys across the United States, Acting U.S. Attorney Jill Westmoreland Rose said in a news release, “Adventist-owned hospitals… allegedly paid doctors’ bonuses based on the number of test(s) and procedures they ordered. This type of financial incentive is not only prohibited by law, but can undermine patients’ medical care. Would-be violators should take notice that my office will use the False Claims Act to prevent and pursue health care providers that threaten the integrity of our healthcare system and waste taxpayer dollars.”

In order to prevent the abuse of government programs like Medicare and Medicaid, the DOJ continues to aggressively pursue health care providers under both the Stark law, which regulates the financial relationships between hospitals and doctors who refer patients to them, and the False Claims Act. As evidenced by the record-setting settlements in both Broward Health and Adventist, the monetary penalties for health care systems that fail to adhere to the law can be substantial. Given the potential liability for non-compliance, and the increased focus on enforcement seen in the last several years, health care providers must count compliance with statutes regulating financial relationships with physicians and claims against federal health care reimbursement programs as among their highest priorities.

For further information on establishing effective compliance programs and avoiding potential liabilities under the Stark Law and FCA, please contact the following FisherBroyles attorneys.

Brian E. Dickerson

Nicole Hughes Waid

Donato J. Borrillo, M.D., J.D