ASCs, hospitals pay millions as scrutiny intensifies for illegal referrals

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The U.S. Justice Department is putting hospitals, ASCs and physician groups under the microscope, in search of improper relationships that violate anti-kickback laws, which could have big consequences for the industry.

Seven lawsuits and settlements in the last year, with combined payments topping $55 million:

1. Akron (Ohio) General Health System agreed to pay $21 million to settle allegations it made improper payments to physicians for referrals from 2010 to 2016, according to a July 2 statement from the Justice Department. After the system was acquired by Cleveland Clinic in 2015, it voluntarily disclosed an alleged improper financial relationship with physician groups. Click here to read more. 

2. Surgical Care Affiliates, based in Deerfield, Ill., and Orlando Center for Outpatient Surgery, agreed to pay $3.4 million in June to settle allegations of paying kickbacks for referrals related to kidney stone procedures. A whistleblower lawsuit alleged the center paid urologist Patrick Hunter, MD, pre-procedure payments for his lithotripsy procedures. Dr. Hunter's estate separately paid $1.75 million to resolve the allegations. Click here to read more. 

3. In April, three Ascension-affiliated hospitals in Texas agreed to pay $20.9 million for paying physicians above market value for services, including on-call coverage and administrative oversight of specialty programs. Click here to read more. 

4. Ashok Kumar, MD, paid $215,228 to settle allegations he accepted kickbacks in exchange for referring patients to Memorial Hospital of Gardena (Calif.) in March. Other defendants in the lawsuit paid an $8.1 million settlement in 2018 to resolve claims the hospital paid above market value to induce referrals. Click here to read more. 

5. Collier Anesthesia Pain in Fort Myers, Fla., and Tampa (Fla.) Pain Relief Clinic agreed to pay $1.6 million to resolve accusations they violated anti-kickback statutes in February. The two groups were accused of sending patients for surgery at ASCs where copayments were waived and submitting improper claims for ancillary tests and services. Click here to read more. 

6. Bismarck, N.D.-based Mid Dakota Clinic paid $5.5 million to settle allegations of an improper financial arrangement with its wholly owned ASC in October 2020. A whistleblower lawsuit alleged the clinic's physicians could make or influence referrals to the ASC and gather revenue. Click here to read more. 

7. Advanced Pain Management in Greenfield, Wis., paid $1 million to settle allegations in October 2020, that the company provided stock incentives to nonemployed physicians to perform procedures at its ASCs and in some cases paid nonemployee physicians to be medical directors. Click here to read more. 

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