A newly unsealed whistle-blower lawsuit alleges Iasis Healthcare garnered millions of dollars in Medicare and Medicaid payments through a web of illegal inducements to referring physicians.
The complaint, filed in 2005 in U.S. District Court in Phoenix, details the claims of Jerre Frazier, the companys former vice president of ethics and business practices for the Franklin, Tenn.-based company. Iasis owns hospitals in Arizona, Florida, Louisiana, Nevada, Texas and Utah.
The alleged misconduct, illegal under the federal Stark and anti-kickback laws, includes doling out directorships and consulting contracts, allowing medically unnecessary procedures and leasing space below market value. In one instance, a surgeon is said to have been paid for consulting hours documented during months spent on his boat in the Caribbean.
Employees who identified regulatory compliance problems either were reassigned from their position or threatened with replacement and were told they were not team players, the complaint alleges.
Facing a deadline from the judge, U.S. Attorney Daniel Knauss filed notice with the court in May that the government was not prepared to join the case but was continuing to investigate Fraziers claims.
Tomi Galin, spokeswoman for Iasis, said the company is encouraged the allegations havent won an endorsement from the Justice Department. Iasis believes this lawsuit is without merit, and we look forward to the opportunity to vigorously defend ourselves, she said.
In the quarter ended June 30, the company earned $6.3 million on revenue of $470.1 million. -- by Gregg Blesch
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