Health system, doctors accused of kickbacks, DOJ sues
Cardiologists and the Infirmary Health System in Mobile, AL, needlessly exposed patients to radiation in a kickback scheme that lasted nine years and cost Medicare, Medicaid, and Tricare an estimated $522 million, according to the U.S. Department of Justice (DOJ).
The DOJ announced recently that it is joining a whistleblower’s lawsuit against Infirmary and the independent Diagnostic Physicians Group. The lawsuit alleges that IMC — Diagnostic and Medical Clinic billed Medicare for services referred by Diagnostic Physicians Group physicians, in violation of the Stark Law and Anti-Kickback Statute. IMC — Diagnostic and Medical Clinic is owned by Infirmary Medical Clinics, a subsidiary of Infirmary Health System, also based in Mobile.
The allegations involve nuclear stress tests, a type of imaging in which patients ingest radioactive dye and are exposed to low levels of radiation to test blood flow through the heart. The lawsuit alleges the tests were blatantly overused because doctors were financially rewarded for ordering more tests, even though they expose patients to small doses of radiation.
The whistleblower is a physician who says in his lawsuit that he was told that the way the hospital paid its physicians was "legally defensible" even though it "could be illegal" under the Stark Law.
The lawsuit was filed in July 2011 by former Diagnostic Physicians Group physician Christian Heesch, MD, under the qui tam, or whistleblower, provisions of the False Claims Act. The act authorizes private parties to sue on behalf of the United States and receive a portion of any recovery. The act also permits the government to intervene and take over a lawsuit, as it has done in this case.
According to his complaint, the whistleblower sued after he was warned to stop asking questions about how the doctors were paid. Mark Nix, CEO of Infirmary Health System, issued a statement that the clinic denies the allegations and will fight them vigorously.
The DOJ reports that it intervenes in only about 20% of all whistleblower claims and a primary reason for joining a case is the belief that the alleged wrongdoing goes beyond financial matters and affects patient health. "Financial arrangements that compensate physicians for referrals encourage physicians to make decisions based on financial gain rather than patient needs," said Stuart F. Delery, acting assistant attorney general for the civil division said in a statement announcing the DOJ involvement. "The Department of Justice is committed to preventing illegal financial relationships that corrupt the integrity of our public health programs."
Enforcement of the Stark Law and the Anti-Kickback Statute is intended to ensure that physicians’ medical judgment is not compromised by improper financial incentives, Delery said. The Stark Law forbids a clinic or hospital from billing Medicare for certain services referred by physicians who have a financial relationship with the entity. The Anti-Kickback Statute prohibits offering, paying, soliciting or receiving remuneration to induce referrals of services or items covered by federal health care programs, including Medicare.
The lawsuit alleges that the IMC — Diagnostic and Medical Clinic improperly paid Diagnostic Physicians Group physicians compensation that included a percentage of the money collected from Medicare for tests and procedures the doctors referred to the clinic. These improper payments, and resulting submission of false claims to the Medicare program, violated the Stark Law and Anti-Kickback Statute, the DOJ claims.
Since January 2009, the Justice Department has recovered a total of more than $14.7 billion through False Claims Act cases, with more than $10.7 billion of that amount recovered in cases involving fraud against federal healthcare programs.