On March 29, 2023, the Department of Justice (DOJ) issued a press release announcing three related civil settlements totaling over $69 million with Covenant Healthcare System and two physicians—Dr. Mark Adams, a neurosurgeon, and Dr. Asim Yunus, an electrophysiologist, to resolve alleged False Claims Act violations. The settlements resolve allegations of a kickback scheme of physicians’ improper referrals to the hospital system. The case arose from a whistleblower complaint filed by a former vice president and CEO of one of the divisions at Covenant, Stacy Goldsholl, in 2012.
The relator’s complaint against Covenant included allegations of violations of the False Claims Act, Michigan Medicaid False Claims Act, the Anti-Kickback Statute, and the Stark Law. According to the announcement, the complaint alleged improper financial relationships by Covenant with eight referring physicians and a physician-owned investment group, resulting in the submission of false claims to the Medicare, Medicaid, TRICARE, and FECA programs. For example, the complaint alleged that Covenant awarded medical directorships and above fair market compensation to physicians who were top referral sources. The complaint alleged that Goldsholl, the whistleblower, raised this concern but was terminated in 2012.
The DOJ listed the following allegations as resolved by the settlement:
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