In one of the largest hospital fraud settlements involving kickback allegations, 473-bed, four hospital McLeod Regional Medical Center of the Pee Dee agreed to pay $15.9 million to settle civil whistleblower allegations of kickbacks, Medicare cost-reporting fraud and physician self-referral law violations, the U.S. attorney in Columbia, S.C., announced.
The government alleged McLeod, located in Florence, S.C., submitted false claims to Medicare and other federal health programs. Government filings indicate McLeod billed for home health services ordered by doctors with whom the hospital and a for-profit subsidiary had improper financial relationships. The government also alleged the not-for-profit community hospital overpaid for physician practices in 1996 and 1997 and incorrectly reported those payments on Medicare cost reports. McLeod also allegedly paid physicians "good will" payments to obtain patient referrals in violation of the Medicare antikickback statute.
In a statement, McLeod President Rob Colones said the settlement allows the hospital to put the matter behind it and remain focused on patient care. The hospital did not admit wrongdoing.
McLeod signed a five-year corporate integrity agreement. A Justice Department spokesman said the government does not anticipate bringing any criminal charges.