The Department of Justice recently announced that Infirmary Health System (IHS) and a physicians group have agreed to pay $24.5 million to settle Stark and kickback allegations.

According to the complaint, two IHS clinics had contracts with a physician’s group, with one purpose; to pay physicians in the group for referrals. These allegations, as described, would have been in violation of the Anti-Kickback Statute and Stark Laws. The Anti-Kickback law forbids offering, paying, soliciting or receiving payments to induce referrals for federal healthcare programs, including Medicare. The Stark Law generally prohibits healthcare providers from billing Medicare for enumerated services referred by physicians who have a financial relationship with that provider.

“Financial arrangements that compensate physicians for referrals encourage physicians to make decisions based on financial gain rather than patients’ needs,” said Assistant Attorney General for the Civil Division Stuart F. Delery.  “The Department of Justice is committed to preventing illegal financial relationships that undermine the integrity of our public health programs.”

As this case was initiated by a physician whistleblower, it should serve as a reminder that fighting healthcare fraud is significantly accomplished through courageous whistleblowers under the False Claims Act, one of the most powerful tools in this effort.  Since January 2009, the Justice Department has recovered more than $14 billion False Claims Act cases involving fraud against federal healthcare programs.

More information for whistleblowers is located at the Nolan Auerbach & White website.