Florida's Halifax Health will pay what may be a record-breaking $85 million settlement and hire two compliance officials who will file regular reports with HHS as part of an out-of-court agreement that allows the hospital to avoid being banned from the Medicare program.
The Daytona Beach hospital was facing a total liability of $343 million for allegedly overpaying six medical oncologists and three neurosurgeons, according to the settlement of a whistle-blower lawsuit last week in U.S. District Court in Orlando.
The hospital's physician services director, Elin Baklid-Kunz, said the payments violated the Stark law ban on overly lucrative payments to Medicare physicians, triggering potential triple-damages under the False Claims Act.
Halifax officials always have maintained that the payments were legal and that the contracts were vetted by expert attorneys. Spokesman John Guthrie said the decision to settle on the eve of trial after five years of litigation was motivated by financial pressures at the tax-supported hospital. The trial was scheduled to begin March 3.
“We believe we have a fiduciary responsibility to avoid the risks associated with trial and the potential for a lengthy appeals process,” Guthrie said in a statement.