On May 14, the U.S. Attorney’s Office for the Eastern District of California announced that Community Health System and its affiliate Physician Network Advantage Inc. (PNA) agreed to pay $31.5 million to resolve whistleblower allegations that they violated the False Claims Act through the payment of illegal kickbacks to physicians.
The case stems from a qui tam suit filed by whistleblower Michael Terpening, who is set to receive approximately $5 million of the settlement.
According to the government, Community Health System and PNA “provided several types of extravagant benefits to induce physicians in the Fresno area to refer their patients to Community facilities for medical services, in violation of the False Claims Act.”
For example, the government alleges that “In a custom-built lounge located on premises at PNA’s offices, known as HQ2, PNA provided expensive wine, liquor, cigars, and meals to referring physicians, with the knowledge and funding of Community.”
Further allegations include claims that “Community and PNA provided financial subsidies for electronic health records technology and equipment used by certain physicians in their private offices in return for the referral of governmental health care program patients to Community” and that “Community paid bonuses to certain physicians ostensibly for participation in clinical integration activities, when the real purpose of the bonuses was to reward referrals.”
The government contends that these alleged actions...
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