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Chicago Hospital to Pay More Than $1.5 Million to Resolve Medicare False Claims Act Allegations

The Stark Law prohibits a hospital from profiting from patient referrals made by a physician with whom the hospital has an improper financial arrangement. A leasing arrangement is improper under the Stark Law absent a written lease, signed by the parties, that specifies the premises covered by the lease. Leasing arrangements must also be commercially reasonable and consistent with "fair market value" for the premises. The Stark Law is intended to ensure that a physician's medical judgment is not compromised by improper financial incentives and are based solely on the best interests of the patient.

"The Justice Department is committed to investigating cases that threaten the integrity of the Medicare program," said Tony West, Assistant Attorney General for the Justice Department's Civil Division." The department will continue to protect patients by pursuing hospitals that have improper financial relationships with physicians."

Rush is one of several defendants in a suit brought in 2004 by two individuals under the whistleblower provisions of the False Claims Act, which permit private citizens with knowledge of fraud against the government to bring a lawsuit on behalf of the United States and to share in any recovery. The lawsuit, in part, involves allegations that Rush entered into prohibited financial relationships with certain physicians. Under the civil settlement announced today, the whistleblowers, Dr. Robert Goldberg and June Beecham, will receive $270,760.

This settlement is part of the government's emphasis on combating health care fraud. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover approximately $2.3 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department's total recoveries in False Claims Act cases since January 2009 have topped $3 billion.

The settlement announced today was the result of a coordinated effort among the Commercial Litigation Branch of the Justice Department's Civil Division; the Department of Health and Human Services, Office of Inspector General; and the Illinois Attorney General's Office.

SOURCE U.S. Department of Justice