Covenant Healthcare System and two of its physicians have paid out more than $69 million to settle alleged kickbacks violating the False Claims Act, the Department of Justice announced Wednesday.
The Saginaw, Michigan-based regional hospital system had finalized the settlement in 2021, but the agreement was kept under wraps as law enforcement continued to investigate the physicians, Mark Adams, M.D. and Asim Yunus, M.D., according to a release from the U.S. Attorney’s Office for the Eastern District of Michigan.
The organization paid out about $67.2 million to the federal government and $1.8 million to the state of Michigan, while the two physicians’ settlements with the feds totaled about $750,000, per the announcement.
“Improper financial relationships and kickbacks undermine the integrity of federally-funded healthcare programs by influencing physician decision making,” U.S. Attorney Dawn Ison said in the announcement. “This outcome emphasizes our Office’s commitment to pursuing justice against parties on both sides of those relationships—the hospital seeking to influence the physician via certain compensation schemes and the physician accepting the compensation."
Covenant’s settlement resolves four allegations related to the Anti-Kickback Statute and the Physician Self-Referral Law, or the Stark Law. These include:
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