The federal government has settled allegations against Detroit Medical Center that two of its hospitals used improper kickbacks to coax doctors to refer Medicare patients there from 2014-17.

DMC and its current and former owners did not admit wrongdoing or liability, but agreed to pay $29.7 million to resolve the case, which originated with a whistleblower, a former Wayne State University doctor who gets $5.2 million of the settlement.

The U.S. Department of Justice alleged that DMC’s Sinai Grace and Harper University hospitals provided 13 hand-picked doctors with free or below-market help from nurse practitioners and physician assistants in exchange for referrals, a violation of the Anti-Kickback Statute. The doctors were chosen, the government said, because they already made significant patient referrals to the hospitals.

DMC cooperated with investigation

The scheme led to improper Medicare billing, the government alleged.

The Anti-Kickback Statute “prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items of services covered by Medicare and other federally funded programs,” the Justice Department said in a news release. The law is meant to ensure that doctors’ “judgments are not compromised by improper financial incentives and are instead based on the best interests of their patients.”

In a statement, DMC said the "conduct began under Vanguard’s ownership of DMC," adding: "No new leases were executed once Tenet owned these...

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