South Texas Health Systems in McAllen, Texas, has agreed to pay $27.5 million to settle claims that it paid kickbacks to physicians for referring patients to its hospitals, according to a release from the U.S. Department of Justice.
The settlement is the result of whistleblower allegations by former employee Bruce Moilan, saying the system disguised kickbacks to physicians through shell contracts, such as medical directorships and lease agreements.
South Texas Health Systems, which comprises six hospitals, also signed a five-year Corporate Integrity Agreement, under which it will establish procedures for tracking and evaluating financial agreements with referral sources.
Read the Justice Department's release on South Texas Health Systems' kickback settlement.