Georgia Hospital System and Physician Agree to $35 Million Settlement with DOJ to Resolve Alleged False Claims Act and Stark Law Violations

The US Department of Justice (DOJ) recently announced that Columbus Regional Healthcare System (Columbus Regional) has agreed to pay up to $35 million and enter into a Corporate Integrity Agreement with the U.S. Department of Health and Human Services Office of Inspector General to resolve allegations that the system violated the False Claims Act by submitting claims in violation of the Stark law.

Under the settlement, Columbus Regional, a Georgia hospital system, agreed to an initial fixed payment of $25 million, plus additional contingent payments not to exceed $10 million. The contingent payments will be based in part on a percentage of the company’s revenue. DOJ also settled related allegations against Dr. Andrew Pippas, who agreed to pay $425,000.

The settlement stemmed from two qui tam lawsuits filed by a former Columbus Regional executive under the federal False Claims Act and the Georgia False Medicaid Claims Act. Among the allegations resolved by the settlement were allegations that between 2003 and 2013, Columbus Regional provided Dr. Pippas compensation that was in excess of fair market value in violation of the Stark law. Columbus Regional also allegedly compensated Dr. Pippas in part based on the number of his referrals. The settlement also resolved allegations that Columbus Regional billed federal health care programs for higher levels of services than were supported by documentation and billed for radiation therapy at higher levels than the therapy that was actually provided to patients.

This settlement illustrates both DOJ’s on-going focus on health care provider compliance with the complex requirements of the Stark law and the risk providers face from qui tam lawsuits for potentially violating those requirements. To reduce the risk of non-compliance, hospitals and other health care providers should carefully analyze all compensation arrangements with physicians, seeking legal counsel as needed to ensure compliance with the complicated Stark law requirements.