Memorial Health University Medical Center and its affiliates in Savannah, Ga., have agreed to pay more than $9.89 million to settle unlawful referral allegations brought under the whistle-blower provision of the False Claims Act by former CEO Phillip Schaengold, according to a report from HHS' Office of Inspector General.
The settlement resolves allegations Memorial paid its physicians in excess of fair market value to induce unlawful referrals for ancillary medical services billed through Medicare, according to the report. The allegations relate to specific physician employment agreements from 2008 to 2010.
Memorial Health made a payment of $5.08 million to settle similar false claims allegations in 2008, according to Mr. Schaengold's legal representation Lars Liebeler PC law firm.
Under terms of the settlement, Memorial and its affiliates agreed to enter a five-year Corporate Integrity Agreement with the HHS, requiring the hospital to retain an independent monitor to assess federal compliance.
"Let this settlement act as a reminder to healthcare providers large and small that the Office of Inspector General is committed to pursuing allegations of Stark Law violations," said Derrick Jackson, special agent in charge of the HHS, OIG in Atlanta.
In an official statement, Memorial Health both voiced its determination to cooperate with federal regulators as well as its dissatisfaction with the legal outcome.
"Memorial expressly denies allegations in the lawsuit and believes that its processes have been, and continue to be, compliant with all legal and regulatory statutes," said the official statement, according to Savannah Morning News.