The federal government continues to stress that improper financial arrangements between hospitals and physicians can "compromise medical judgment and threaten the integrity of federal healthcare programs," according to a new report from law firm Bass, Berry and Sims.
These Stark law cases often result in significant settlements because the improper arrangements can involve a large number of claims, the report said.
Here are six multimillion-dollar cases involving hospital and physician kickback schemes from 2023:
1. In March, Saginaw, Mich.-based Covenant HealthCare and two physicians paid $69 million in three civil settlements for alleged improper arrangements with referring physicians. Among other claims, Covenant allegedly entered into contracts with physicians to serve as medical directors that did not satisfy any Stark law exceptions.
2. In May, Massachusetts Eye and Ear in Boston agreed to pay more than $5.7 million to settle allegations that parts of its physician compensation models violated Stark law. The hospital allegedly paid an affiliated physician group a percentage of its operating margin from facility fees. The physician group then paid a portion of these funds as bonuses to employed physicians based on performed services or hours worked.
3. Also in May, Detroit Medical Center agreed to pay roughly $29.7 million to settle claims from a former employed physician. The government alleged that the health system provided services of non-physician practitioners at no cost or below fair market level value to physicians to induce referrals.
4. In June, Columbia, S.C.-based St. Francis Health system agreed to pay $36.5 million to resolve allegations it violated Stark law by making payments to orthopedic surgeons tied to volume or value of referrals.
5. In December, Newark, Del.-based ChristianaCare agreed to pay $42.5 million to resolve claims that the hospital system provided independent neonatologists and surgeons with remuneration in exchange for referrals.
6. Also in December, Indianapolis-based Community Health Network agreed to pay $345 million to resolve claims that senior management recruited physicians based on their referrals and paid compensation above fair market value based on referrals to physicians.