BUFFALO — Catholic Health System, Inc. (CHS) has agreed to pay almost $3.3 million to resolve allegations that it submitted false claims to the Medicare program in violation of the Physician Self-Referral Law, U.S. Attorney Michael DiGiacomo announced late last week.
The Physician Self-Referral Law, commonly known as the Stark Law, prohibits healthcare entities such as hospitals from obtaining reimbursement from Medicare for certain health services that were referred by a physician who has a financial relationship with the healthcare entity.
The U.S. Government alleged that CHS and its affiliated hospitals had financial relationships with non-employee physicians who referred health services, such as laboratory testing, hospital services or medical supplies, to the health system, which then billed Medicare for the referred services.
According to DiGiacomo, while the Stark Law contains exceptions, in CHS’s case the compensation arrangements failed to meet any of the exceptions because they were not “commercially reasonable” or the compensation received by the physicians exceeded fair market value for the services they provided.
“The Stark Law is designed to protect Medicare by ensuring that physician referrals are not influenced by financial interest,” DiGiacomo stated in a written release. “This office is committed to holding health care providers accountable who engage in such conduct.”
The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by Gary Tucker. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. The qui tam case is captioned United States ex rel. Tucker v. Catholic Health System, Inc., 20-cv-1482 (W.D.N.Y.). Tucker will receive a share of the settlement, the exact amount of which is $3,293,122.66.
The claims resolved by the settlement are allegations only and there has been no determination of liability, the release noted.