Covenant Healthcare System, along with two of its physicians, recently reached agreements with the Department of Justice (DOJ) to pay more than $69 million to resolve allegations that they participated in improper financial relationships, resulting in the submission of false claims to Medicare, Medicaid, TRICARE, and FECA programs.
According to the government, Covenant engaged in various schemes and had “improper financial relationships” with eight referring physicians and a physician-owned investment group. At various points from 2006 to 2016, Covenant had contracts with six physicians to serve as medical directors (Asim Yunus, M.D.; Kimiko Sugimoto, M.D.; Sujal Patel, M.D.; Sussan Bays, M.D.; Guy Boike, M.D.; and Thomas Damuth, M.D.). However, those arrangements did not satisfy any exceptions to the Stark Law or the Anti-Kickback Statute, which meant that referrals from the physicians to Covenant were in violation of the False Claims Act.
Additionally, from June 2006 to December 14, 2009, Covenant employed Mark Adams, M.D. During that time, the relationship did not satisfy any Stark Law exception and referrals for healthcare services by Adams to Covenant were in violation of the False Claims Act.
Covenant also rented office space to Ernie Balcueva, M.D., from January 21, 2009 through July 31, 2013. However, Balcueva did not pay rent to Covenant, instead providing referrals to Covenant in exchange for free office rent. This was in violation of the Anti-Kickback Statute,...
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