DOJ Updates

Kickback Allegations Settled for $20.25 Million

Sanford Health, Sanford Medical Center, and Sanford Clinic (collectively, Sanford), a South Dakota health system, will pay $20.25 million to settle allegations that they violated the False Claims Act. The health system allegedly knew that one of its top neurosurgeons was receiving kickbacks in return for using implantable devices distributed by his physician-owned distributorship (POD). The neurosurgeon was also allegedly performing medically unnecessary spinal surgeries involving the devices. According to the government, Sanford was warned repeatedly by the neurosurgeon’s colleagues about the kickback scheme and the medically unnecessary procedures, but Sanford continued to employ the neurosurgeon, allowed him to profit from the kickback scheme, and in turn submitted claims to federally-funded programs for the surgeries. Sanford also agreed to enter into a Corporate Integrity Agreement with HHS-OIG.

The DOJ press release is here.

Encompass Health Settles Improper Billing Allegations for $4 Million

Encompass Health Corporation, f/k/a HealthSouth Corporation, agreed to pay $4 million to resolve allegations that it improperly billed Medicare. The government alleged that from 2008 to 2012, an inpatient rehabilitation facility owned and operated by Encompass in Nevada assigned inaccurate and artificially low admission Functional Independence Measure scores on patient assessment forms. According to the government, the facility then submitted claims to Medicare for amounts greater than was warranted for the services it provided to the patients.

The USAO press release is here.