The former CEO of a Texas hospital has agreed to pay more than $5.3 million to resolve allegations under the False Claims Act involving laboratory testing.
Jeffrey Madison, former CEO of Little River Healthcare, a critical access hospital in Rockdale, Texas, allegedly caused the submission of false claims for laboratory testing to federal healthcare programs, according to an Oct. 2 Justice Department news release. This allegedly occurred from January 2015 to June 2018.
The settlement resolves those allegations, which were made in a 2022 lawsuit. It also resolves allegations that under Mr. Madison's leadership, Little River made illegal payments to physicians to induce their laboratory testing referrals to the hospital.
Additionally, Doyce Cartrett Jr., MD, of Silsbee, Texas, allegedly received kickbacks for lab referrals. After Dr. Cartrett informed Little River of potential referral volume, Mr. Madison allegedly agreed to have the hospital pay Dr. Cartrett $2,000 monthly, disguised as medical director fees, from February 2015 to May 2017, even though no services were provided, to secure his referrals, prosecutors said.
Mr. Madison accepted responsibility for the allegations and, as part of the settlement, was barred from Medicare, Medicaid and Tricare participation for 25 years, according to the Justice Department.
Read the full settlement here.