OKLAHOMA CITY – An Oklahoma City hospital, a management company and a physician group will pay $72.3 million to resolve allegations under the False Claims Act and the Oklahoma Medicaid False Claims Act.
The U.S. Justice Department identified the health care providers as Oklahoma Center for Orthopaedic and Multi-Specialty Surgery (OCOM), a specialty hospital in Oklahoma City; its part-owner and management company, USP OKC, Inc., and USP OKC Manager, Inc. (collectively USP); Southwest Orthopedic Specialists, PLLC (SOS), an Oklahoma City-based physician group; and two SOS physicians.
The health care professionals were accused of improper relationships between OCOM and SOS, resulting in the submission of false claims to the Medicare, Medicaid and TRICARE programs, the Justice Department related.
TRICARE is the health care program for the U.S. military, including Fort Sill and Altus Air Force Base.
The Anti-Kickback Statute prohibits offering, paying, soliciting or receiving remu- neration to induce referrals of items or services covered by Medicare, Medicaid, and other federally funded programs.
The Physician Self-Referral Law, commonly known as the Stark Law, prohibits a hospital from billing Medicare for certain services referred by physicians with whom the hospital has an improper financial arrangement, including payment of compensation that exceeds the fair market value of the services actually provided by the physician and the provision of free or below-market rent and office staff.
Both the Anti-Kickback Statute and the Stark Law are intended to ensure that physicians’ medical judgments are not compromised by improper financial incentives and instead are based on the best interests of their patients, the Justice Department explained.
“The Defense Criminal Investigative Service is committed to ensuring that TRICARE, the U.S. military health care program, continues to provide safe and superior medical care to America’s warfighters,” said Michael C. Mentavlos, Special Agent in Charge, Defense Criminal Investigative Service Southwest Field Office. “Kickback schemes such as these undermine our health care system, compromise medical decisions, and waste precious taxpayer dollars needed to provide critical care for our warfighters, their family members, and military retirees.”
“Offering illegal financial incentives to physicians in return for patient referrals undermines the integrity of our health care system,” said Acting Assistant Attorney General Ethan P. Davis of the Department of Justice Civil Division. “Patients deserve the independent and objective judgment of their health care professionals.”
“Patients deserve care based on good medicine and informed choice, not the corrupting inf luence of money and other benefits,” said U.S. Attorney Timothy J. Downing for the Western District of Oklahoma. “No matter how complex and intertwined modern health care economics become, we are committed to ensuring that untainted care is always provided.”
The settlement resolves allegations that between 2006 and 2018, OCOM and USP provided improper remuneration to SOS and certain of its physicians in exchange for patient referrals to OCOM in the form of (1) free or below-fair market value office space, employees, and supplies, (2) compensation in excess of fair market value for the services provided by SOS and certain of its physicians, (3) equity buyback provisions and payments for certain SOS physicians that exceeded fair market value, and (4) preferential investment opportunities in connection with the provision of anesthesia services at OCOM.
The alleged conduct resulted in the submission of claims for services provided to these illegally referred patients, in violation of the False Claims Act and the Oklahoma Medicaid False Claims Act.
The settlement also resolves issues arising from USP’s preferential offering of investment opportunities to physicians at four surgery facilities in Texas. As a result of this settlement, USP will pay $60.86 million to the United States, $5 million to the State of Oklahoma, and $206,000 to the State of Texas. SOS and two of its physicians, Anthony L. Cruse, D.O., and R.J. Langerman, Jr., D.O., will pay $5.7 million to the United
States and $495,619 to the State of Oklahoma.
Contemporaneous with the civil settlement, OCOM and SOS each entered into five-year Corporate Integrity Agreements (CIAs) with the U.S. Department of Health and Human Services – Office of Inspector General. The agreements require, among other things, that OCOM and SOS each maintain a compliance program and hire an independent organization to review arrangements entered into by or on behalf of their respective entities. They also increase individual accountability by requiring compliance-related certifications from their key executives.
The allegations resolved by the settlement were brought in a lawsuit filed under the whistleblower provisions of the False Claims Act, which permit private parties to sue on behalf of the United States for false claims and to receive a share of any recovery. The whistleblower also alleged claims under the Oklahoma Medicaid False Claims Act. The whistleblower share to be awarded in the case has not yet been determined.
Tips and complaints about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Ser- vices at 800-447-8477.