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Hospital system agrees to $16M settlement for decade old claim

The Department of Justice (DOJ) recently announced a southern hospital system, Piedmont Healthcare, Inc., had agreed to pay $16 million to settle allegations of wrongdoing. Both parties intend the settlement to resolve two separate legal claims.

How did the case begin?

The case is a result of a qui tam action. The False Claims Act (FCA) includes a provision that allows citizens to move forward with a qui tam, or whistleblower, action. In this instance, a private citizen brought the case forward and will receive a portion of the settlement. The government has stated the individual that brought the claim forward in this case will get almost $3 million of the government's recovery.

What were the allegations?

The allegations included:

  • Anti-Kickback Statute violation. The government claimed the hospital group violated the Anti-Kickback Statute (AKS) when it purchased a cardiology group at an unreasonably rate. According to the government, the rate was above fair market value. As a result, the transaction allegedly qualified as an illegal kickback from the hospital system to the physicians who owned the cardiology group.
  • False Claims Act violations. The DOJ also stated the hospital system violated the FCA due to questionable billing from 2009 through 2013. During that time, the government states the hospital system's case managers would bill Medicare and Medicaid for inpatient level of care even though the physicians treating the patients recommended outpatient or observation services. This allegedly resulted in excessive and unwarranted claims to the Medicare and Medicaid, a violation of the FCA.

Instead of fighting the allegations, the hospital group chose to settle the claims. The settlement resolves issues that stem back over a decade.

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