West Virginia Hospital Agrees To Pay Feds $50 Million To Drop Medicare Fraud Allegations

A West Virginia hospital has agreed to pay $50 million to the Federal government to dismiss claims that it paid illegal kickbacks to physicians in exchange for referrals of Medicare beneficiaries.

Investigators say the former executive vice president approached them and said the hospital began in 2007 to pay illegal payments to doctors under previous ownership. They say the kickbacks were based upon the quantity and quality of the patients referred them, or if the services provided would be of a higher value than the then-going rate.

Prosecutors say the kickbacks are a violation of the Physician Self-Referral Law, also known as the Stark Law, which makes it illegal for hospitals to bill Medicare for certain services provided by doctors with whom the hospital already has a relationship and doesn’t fall into one of the law’s exceptions. The kickbacks were also a violation of the Anti-Kickback Statute, which makes it illegal to offer to pay for referrals for items or services covered by one of the several Federal health insurance plans, including Medicare, Medicaid, TRICARE, and others.

The defendant hospital agreed to pay a total of $50 million to the Federal government to resolve the claims against it, allowing it to continue to remain operating and meeting the region’s health care needs. Defendants of this kind are also frequently enrolled in programs with the Federal government to monitor the company’s operations to insure that such violations do not happen again in the future.

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