Government Encourages Hospital Employees to Blow the Whistle on Improper Compensation Arrangements

The enforcement magnifying glass has, once again, returned to the hospital industry, which was the primary target of the False Claims Act in the 1990s.

This renewed interest stems, in part, from heightened concerns that hospital systems are improperly influencing patient referrals for tests and services, in violation of the Stark and Anti-Kickback Statutes.

The most publicized example played out earlier this year in a court in South Carolina, where a jury found that Tuomey Health System violated Stark and the False Claims Act to the tune of $237 million in damages.

In a more recent example, a Florida district court recently green-lighted a jury trial in a government-intervened False Claims Act qui tam action, alleging that Halifax Hospital Medical Center violated the federal Stark law, by paying physicians so-called “productivity bonuses.”

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