Taxpayer-supported Broward Health will pay $69.5 million in penalties to settle federal allegations that it paid illegal kickbacks to nine doctors who referred patients to its hospitals in a fraud scheme that went on for more than a decade.
The settlement made public Tuesday arose from a lawsuit filed by Fort Lauderdale orthopedic surgeon Dr. Michael Reilly, under the False Claims Act. Dr. Reilly will receive $12,045,655.51 for blowing the whistle, federal officials said.
The settlement comes as a relief to Broward Health’s current leaders, who have been forced to deal with a federal investigation that was triggered by the actions of Broward Health officials who have long since moved on.
“This is just a resolution of something that’s been on the table for the last four or give years and goes back as far as 2001,” said Dr. Nabil El Sanadi, Broward Health’s chief executive officer. “It’s always good to get things like this over with.”
According to Dr. Reilly’s complaint, filed in federal court, Broward Health improperly compensated its employed physicians at excessive levels that caused “net operating loses of $150 million” from 2004-2011, when the complaint was filed. Broward Health made sure, however, that Medicare and Medicaid referrals from those doctors more than offset those losses at its hospitals and clinics.
The complaint alleged that Broward Health “knowingly violated federal Stark and Anti-Kickback laws, and deliberately submitted “thousands” of false claims to federal health care programs arising from “tainted referrals.”
The federal Stark Law generally prohibits doctors from referring Medicare or Medicaid patients to hospitals with which they have a financial relationship. Likewise, it forbids hospitals from submitting claims from prohibited referrals.
The Anti-Kickback statute forbids offering, paying or soliciting or receiving anything of value to induce or reward referrals or generate federal healthcare program business. Criminal violators face up to five years in prion and a $25,000 fine for each violation.
No criminal charges, however, were announced with the unsealing of the whistleblower case.
More than two-dozen physicians were named in a federal subpoena that sought records about their business ties to Broward Health. The subpoena was served at the outset of the investigation in May 2011.
David Di Pietro, chair of the North Broward Hospital District Board of Commissioners, put out a statement Tuesday afternoon.
“The resolution of this matter and today’s agreement will enable Broward Health to move beyond the allegations that arose in the context of this investigation. It is important to note that those allegations were focused solely on highly complicated contracts with physicians. This investigation was never about patient care,” Di Pietro said.