published Thursday, August 23rd, 2012

Memorial to pay $1.3 million to settle kickback claims

Memorial Hospital is located at 2525 de Sales Avenue in Chattanooga.
Memorial Hospital is located at 2525 de Sales Avenue in Chattanooga.
Photo by Angela Lewis /Chattanooga Times Free Press.
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Memorial Health Care System has agreed to pay more than $1.3 million to settle claims that it paid kickbacks to doctors to refer patients to its facilities, according to a news release from the U.S. attorney’s office.

Memorial Health Care System Inc., the nonprofit corporation that operates Memorial Hospital in Chattanooga and Memorial Hixson Hospital, agreed to settle alleged violations of the federal False Claims Act and other federal laws and regulations, the release states.

The settlement agreement alleges that, beginning as early as January 2003, Memorial entered into a series of financial arrangements with certain physicians and physician groups through which it provided financial benefits intended to induce physicians to refer patients to Memorial facilities. These arrangements violated federal laws known as the Ethics in Patients Referrals Act (or the “Stark law”) and the Anti-Kickback Statute and resulted in the submission of false claims to the Medicare system.

U.S. Attorney William C. Killian explained that these laws are intended to protect patients by ensuring that physicians make patient referral decisions based on the patients’ best interests without being influenced by payments or financial benefits received from hospitals competing for their business.

“Health care fraud and abuse has been and continues to be a major point of emphasis for the Justice Department and this Office,” said U.S. Attorney Killian. “We will continue to enforce the Ethics in Patient Referrals Act and to protect the Medicare trust fund.”

This story was updated on Aug. 23. The amount to settle claims is $1.3 million.

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