Federal Judge Rules Bradford Regional Violated Stark Act

A federal judge has ruled that Bradford (Penn.) Regional Medical Center has violated the federal Stark Act by entering into an illegal financial relationship with two physicians and their medical practice and submitting claims to Medicare based upon referrals from them, which could result in damages in excess of $20 million or more, according to a Stone Law Firm news release.

The lawsuit was originally filed under the False Claims Act by four physicians who were members of the BRMC medical staff. The physicians are represented by attorneys from Stone Law Firm in Pittsburgh. Internists Peter Vaccaro, MD, and Kamran Saleh, MD, who both ran internal medicine practice V&S Medical Associates, allegedly entered into a prohibited financial arrangement with BRMC, under which BRMC subleased a nuclear imaging camera from V&S that the practice was using to perform in-house diagnostic tests rather than refer patients to the hospital. Under this sublease agreement, BRMC allegedly paid V&S more than $23,000 each month.

However, the prosecution said the agreement was not a bona fide sublease of equipment needed by the hospital, which already had its own nuclear camera, but was instead a disguised attempt to pay Drs. Vaccaro and Saleh for patient referrals. The lawsuit claims BRMC's CEO George Leonhardt "would not have entered into the sublease arrangement if he knew that BRMC would not receive any referrals from Drs. Vaccaro and Saleh." The nuclear camera was allegedly never transported to the hospital but remained at V&S and was not even used for nuclear imaging tests after a few months, according to the news release.

In addition to violations of Stark Law, BRMC is under fire for allegations it violated the Anti-Kickback Statute. A jury must decide whether the defendants possessed the necessary intent to be liable under the Anti-Kickback Statute.

Read the news release about the Bradford Regional Medical Center's alleged Stark violations.

Read other coverage about Stark Law violations:

- CMS Issues Stark Act Voluntary Self-Referral Disclosure Protocol — 9 Key Concepts

- Guidance on Better Compliance to Stark Law: Q&A With Bob Wade of Baker & Daniels

- Judge Orders South Carolina's Tuomey Hospital to Pay $49.4M for Stark Act Violations

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