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Physician-owned hospital in Dallas pays $7.5M to settle kickback allegations: 5 things to know

Pine Creek Medical Center, a Dallas-based physician-owned hospital, paid $7.5 million to settle allegations the hospital violated the False Claims Act, according to the Department of Justice.

Here are five things to know:

1. The U.S. government alleged Pine Creek illegally paid kickbacks for marketing and/or advertising services on behalf of physicians who referred patients to the hospital, including Medicare and Tricare beneficiaries.

"Healthcare providers that attempt to profit from illegal kickbacks will be held accountable," said Principal Deputy Assistant Attorney General Chad Readler, who heads up the Justice Department's Civil Division. "Improper financial incentives can distort medical decision making and drive up healthcare costs for federal healthcare programs and their beneficiaries."

2. The hospital allegedly paid for radio and television advertising, pay-per-click campaigns, billboards, website upgrades, brochures and business cards, as well as other marketing forms, in exchange for patient referrals, according to the DOJ.

3. Pine Creek has agreed to pay $7.5 million to resolve the kickback claims as well as enter into a corporate integrity agreement with the Office of Inspector General. Under the integrity agreement, the hospital must undertake substantial internal compliance reforms for the next five years.

4. The allegations were originally brought in a whistle-blower lawsuit under the qui tam provision of the False Claims Act, allowing private parties to bring suits on behalf of the government. The whistle-blower is able to share in the recovery, and in this case the former Pine Creek marketing department employee who filed the suit will receive $1.125 million.

5. The U.S. government will continue to pursue kickback cases aggressively, according to the DOJ's release. "Hospitals that try to boost their profits by paying kickbacks to physicians will instead pay for their improper conduct," said Special Agent in Charge of the OIG's Dallas Region C.J. Porter. "We will continue to investigate such illegal business arrangements that undermine impartial medical judgment."

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