Saginaw, Mich.-based Covenant HealthCare and two physicians have paid more than $69 million in three civil settlements to resolve alleged violations of the False Claims Act.

The seven-hospital system allegedly engaged in improper financial relationships with eight referring physicians and a physician-owned investment group, leading to the submission of false claims to Medicare, Medicaid, Tricare and the Federal Employees' Compensation Act, according to the Justice Department. Two of the physicians — neurosurgeon Mark Adams, MD, and electrophysiologist Asim Yunus, MD — will pay the U.S. $406,551 and $345,987 respectively, to resolve allegations related to their relationships with Covenant.

The settlement with Covenant includes the following allegations in violation of the Anti-Kickback Statute or the False Claims Act:

• Between 2006 to 2016, Covenant had contracts with Dr. Yunus and Kimiko Sugimoto, MD; Sujal Patel, MD; Sussan Bays, MD; Guy Boike, MD; and Thomas Damuth, MD; to serve as medical directors. However, none of these arrangements satisfied exceptions to the Anti-Kickback Statute or Stark Law, so referrals the physicians made to Covenant allegedly violated the False Claims Act.
  
  
• From 2006 to 2009, Covenant employed Dr. Adams, and this financial relationship allegedly did not satisfy any exception to Stark Law, so referrals he made to Covenant violated the False Claims Act.
  
  
• From 2009 through 2013, Covenant rented office space to oncologist Ernie Balcueva, MD. The...

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