Texas hospital Citizens Medical Center will pay the government $21.8 million to settle allegations that it illegally paid doctors for referrals, the U.S. Justice Department announced Tuesday.
Attempts to reach the county-owned hospital in Victoria, Texas, and its attorneys for comment were not successful Tuesday afternoon. The hospital did not admit liability as part of the settlement.
The government alleged that the hospital paid several cardiologists more than the fair market value of their services. It had also alleged that the hospital paid bonuses to emergency room doctors based partly on the value of their cardiology referrals. The compensation arrangements, the Justice Department said, triggered the False Claims Act because they violated the Stark law, which governs physician referrals and financial relationships.
The allegations against Citizens Medical Center stem from a whistle-blower complaint filed by three physicians who had privileges to practice at the hospital at the time: Dr. Dakshesh “Kumar” Parikh, Dr. Harish Chandna and Dr. Ajay Gaalla.
Under the False Claims Act, whistle-blowers may file lawsuits on behalf of the government, and the government may then opt to join in the lawsuits. Whistle-blowers are entitled to a portion of money the government recovers.
In this case, the three whistle-blowers will collectively receive nearly $6 million, according to the Justice Department.