The former CEO at Physicians Regional Medical Center in Naples, Fla., has filed a whistleblower suit against Health Management Associates alleging the hospital operator provided kickbacks to physicians in exchange for referrals, according to a Naples Daily News report.
Michael Mastej, who led the 100-bed hospital from Feb.-Oct. 2007, filed the suit in Jan. under seal. Mr. Mastej was terminated from the position in Oct. 2007, according to the report.
The suit alleges that HMA provided kickbacks, beginning in early 2007, to physicians for referrals in the form of on-call payments, reduced or free office space rentals and trips to the Masters Golf Tournament in Augusta, Ga. The Anti-kickback Statute prohibits inducements in return for referrals, and the False Claims Act provides a mechanism for a private party to bring an action on behalf of the government.
A specific example of an inducement included in the suit is a $2,000 daily payment to Neuroscience and Spine Associates for on-call coverage in the emergency department at Physicians Regional at Pine Ridge — PRMC and Pine Ridge are part of the same health system, managed by HMA. Mr. Mastej alleges the Pine Ridge CEO Geoffrey Moebius paid the on-call stipends as inducements, as physicians from the group did not perform trauma or emergency neurosurgery. Mr. Mastej further claims he was asked by Mr. Moebius to split the cost of the payments, but he refused, recognizing them as inducements.
The Department of Justice began investigating the complaint after it was filed and was granted two extensions to join the suit. However, the DOJ did not complete its investigation by July 29 as was needed, and ultimately did not join the case.
While the suit only involves kickbacks at Physicians Regional, the suit claims the kickbacks were part of a "nationwide business strategy." HMA said in a statement the allegations had no merit.
Scott Becker, JD, CPA, a partner at McGuireWoods, notes three points on the case. First, the success of these qui tam suits is much higher when the government intervenes. Here, the government has decided not to intervene. Second, this suit is indicative of a large and growing number of qui tam suits. These are often brought by former employees or competitors. Third, this case illustrates the importance of always having valuation support to ensure compliance for such compensation relationships.
Read the Naples Daily News report on HMA.
Michael Mastej, who led the 100-bed hospital from Feb.-Oct. 2007, filed the suit in Jan. under seal. Mr. Mastej was terminated from the position in Oct. 2007, according to the report.
The suit alleges that HMA provided kickbacks, beginning in early 2007, to physicians for referrals in the form of on-call payments, reduced or free office space rentals and trips to the Masters Golf Tournament in Augusta, Ga. The Anti-kickback Statute prohibits inducements in return for referrals, and the False Claims Act provides a mechanism for a private party to bring an action on behalf of the government.
A specific example of an inducement included in the suit is a $2,000 daily payment to Neuroscience and Spine Associates for on-call coverage in the emergency department at Physicians Regional at Pine Ridge — PRMC and Pine Ridge are part of the same health system, managed by HMA. Mr. Mastej alleges the Pine Ridge CEO Geoffrey Moebius paid the on-call stipends as inducements, as physicians from the group did not perform trauma or emergency neurosurgery. Mr. Mastej further claims he was asked by Mr. Moebius to split the cost of the payments, but he refused, recognizing them as inducements.
The Department of Justice began investigating the complaint after it was filed and was granted two extensions to join the suit. However, the DOJ did not complete its investigation by July 29 as was needed, and ultimately did not join the case.
While the suit only involves kickbacks at Physicians Regional, the suit claims the kickbacks were part of a "nationwide business strategy." HMA said in a statement the allegations had no merit.
Scott Becker, JD, CPA, a partner at McGuireWoods, notes three points on the case. First, the success of these qui tam suits is much higher when the government intervenes. Here, the government has decided not to intervene. Second, this suit is indicative of a large and growing number of qui tam suits. These are often brought by former employees or competitors. Third, this case illustrates the importance of always having valuation support to ensure compliance for such compensation relationships.
Read the Naples Daily News report on HMA.