Broward Health, a large public hospital system in South Florida, has agreed to pay the U.S. government $69.5 million dollars to settle allegations of federal health care fraud. Broward Health was accused of violating the False Claims Act and the Stark Law by compensating physicians for referrals.
Dr. Michael Reilley Helps Recover $69.5 Million for Taxpayers
The allegations came to light in 2010 when Dr. Michael T. Reilley, an orthopedic surgeon based in Ft. Lauderdale, filed a whistleblower suit accusing Broward of paying doctors for referrals to their hospitals. Michael Reilley will receive $12 million as his portion of the settlement.
The Stark Law prohibits certain financial relationships between doctors and referring hospitals. It specifically prohibits hospitals from compensating doctors for referrals, since doing so creates a conflict of interest. It also bans billing these referred patients’ medical costs to Medicare. The purpose of the law is to prevent doctors from making referrals based on their own potential financial gain, rather than the best interest of the patient.
Government Turns on the H.E.A.T. in Broward Health Kickback Case
According to the lawsuit, Broward allegedly paid at least nine physicians for referrals, and then billed Medicare for the resulting medical treatments. Reilley filed the original suit under the whistleblower provisions of the False Claims Act. The case was then taken over by the U.S. government, as part of a coordinated effort of the Health Care Fraud Prevention and Enforcement Action Team (HEAT), which was formed in 2009 as a comprehensive, multi-agency approach to fighting healthcare fraud across the country.
According to Special Agent in Charge Shimon R. Richmond of the U.S. Department of Health and Human Services-Office of Inspector General (HHS-OIG), “Improper financial rewards given to physicians in exchange for patient referrals corrupts medical decision making and inflates health care costs . . . Our agency will continue to root out such behavior from our health care system.”
Assistant AG Benjamin Mizer Says Settlement Works Toward Affordable Health Care
Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division stated that “The Department of Justice has long-standing concerns about improper financial relationships between health care providers and their referral sources, because those relationships can alter a physician’s judgment about the patient’s true health care needs and drive up health care costs for everybody. In addition to yielding a recovery for taxpayers, this settlement should deter similar conduct in the future and help make health care more affordable.”
Since January 2009, the U.S. government has recovered more than $25 billion in fraudulent money through False Claims Act cases. Like the Broward Health case, more than $16 billion of that amount has been recovered in cases involving fraud against federal health care programs like Medicare and Medicaid. The Broward Health case is considered a new landmark in the fight against medical fraud, as it’s resulted in the single largest settlement without litigation reached under the Stark Law to date.
Regarding the $69.5 million Broward Health settlement, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida said “Our citizens deserve medical treatment uncorrupted by excessive salaries paid to physicians as a reward for the referral of business rather than the provision of the highest quality healthcare. This office will be steadfast in continuing to devote all necessary resources to ensure that anyone rendering medical care does so for the sole benefit of the patient and in compliance with the law.”