Community Health Network has agreed to pay the United States government $345 million to settle allegations that it engaged in a years-long scheme to recruit physicians and pay them huge salaries and bonuses in return for “downstream referrals” on medical procedures.
The U.S. Department of Justice said Tuesday the agreement settles allegations that senior management at Community Health recruited hundreds of local physicians as far back as 2008 and paid them salaries that were significantly higher, sometimes double, than they were receiving in their own private practices.
Community submitted an unspecified number of claims to Medicare for services that resulted from the unlawful referrals, the Justice Department said.
That violated a federal statute known as the Stark Law, which prohibits hospitals from billing for certain services referred by physicians with whom the hospital has a financial relationship unless the physicians’ compensation are consistent with fair market value and not based on the value or volume of their referrals to the hospital.
“The Stark Law was enacted to ensure that the clinical judgment of physicians is not corrupted by improper financial incentives,” Brian Boynton, head of the Justice Department’s civil division, said in written remarks. “Today’s recovery demonstrates the Department’s resolve to protect the integrity of federal health care programs and to safeguard the taxpayer dollars used to support these important programs.”
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