Could A Sweetheart Contract Or Lease Turn Sour?

Posted by donna@healthlawcenterplc.com in Aug, 2018

Justice Department Settlement

Last week the United States Department of Justice announced a settlement agreement with William Beaumont Hospital, located in the Detroit area, based on allegations Beaumont made false claims to the Medicare, Medicaid, and TRICARE programs. The allegations are based on improper relationships with eight referring physicians. Under the settlement agreement, Beaumont is required to pay a total of $84.5 million, with $82.74 million being paid to the United States and $1.76 million to the State of Michigan. In addition to resolving its False Claims Act liability, Beaumont has entered into a five-year Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General which includes, among other things, an arrangements review to be conducted by an Independent Review Organization.

The settlement resolves allegations that between 2004 and 2012, Beaumont provided compensation substantially in excess of fair market value and free or below-fair market value office space and employees to certain physicians to secure their referrals of patients in violation of the Anti-Kickback Statute and the Stark Law, and then submitted claims for services provided to these illegally referred patients, in violation of the False Claims Act. The settlement also resolves claims that Beaumont allegedly misrepresented that a CT radiology center qualified as an outpatient department of Beaumont in claims to federal health care programs.

If you are a physician who has contractual relationships with hospitals in which you are receiving compensation in excess of fair market value, or have entered into a below-fair market office lease with a hospital, you, as well as the hospital may be in violation of several federal and Michigan laws. If you are unsure of possible liability, contact Donna J. Craig, RN, JD with The Health Law Center who may assist you in reviewing these transactions and determining your liability exposure.