Sutter Health to Pay $45.6 Million to Settle Illegal Kickback and Medicare Fraud Claims, Whistleblower Receives $5.9 Million Award

Sutter Health to Pay $45.6 Million to Settle Illegal Kickback and Medicare Fraud Claims, Whistleblower Receives $5.9 Million Award

On November 14, Sutter Health agreed to pay $30.5 million to settle a whistleblower lawsuit over anti-kickback violations. One day later, the California healthcare provider agreed to pay another $15.1 million to resolve a separate Medicare fraud lawsuit.

The $30.5 million settlement resolves allegations that Sutter Health paid illegal kickbacks to doctors in exchange for patient referrals. The complaint that initiated the government’s investigation was filed by a compliance officer who first attempted to raise concerns about the misconduct internally.

The additional $15.1 settlement resolved allegations that Sutter Health illegally billed Medicare for services referred by doctors who were receiving kickback payments and double-billed the government program for certain services.   

“The Stark Law prohibits a hospital from billing Medicare for certain services referred by physicians with whom the hospital has a financial relationship, unless that relationship satisfies one of the law’s statutory or regulatory exceptions. . . The law is intended to ensure that medical decision-making is not influenced by improper financial incentives and is instead based on the best interests of the patient,” a spokesperson for the prosecution said....

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