McLeod Regional Medical Center of the Pee Dee, Florence, S.C., will pay $15.9 million to settle civil whistleblower allegations that include paying kickbacks to physicians, submitting fraudulent Medicare cost reports and violating the so-called Stark laws. The fraud settlement is among the largest to date involving kickback allegations. According to the federal government, the 473-bed, four-hospital system allegedly billed for home health services ordered by doctors with whom the hospital and its for-profit subsidiary, McLeod Physician Services, had improper financial relationships. The hospital allegedly gave physicians "good will" payments, higher than market value salaries and other types of remuneration as a form of kickbacks for patient referrals. It also allegedly overpaid for physician practices in 1996 and 1997, incorrectly reported the purchases on Medicare cost reports, included unallowable costs on cost reports to offset losses on the practices, and falsely certified in its cost reports that its services weren't tainted by violations of federal law. The hospital later discovered the unallowable costs, including the physician practice purchases, and reported them to the government. It admitted no guilt in the settlement, which the hospital said would be funded from reserves. -- by Mark Taylor
S.C. hospital settles fraud case for $15.9 million
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