A southwest Missouri hospital and its affiliate will pay the government $5.5 million to settle allegations that they violated the False Claims Act by paying doctors bonuses based partly on the value of their referrals.
Mercy Health Springfield Communities denied the allegations in the settlement agreement.
"This settlement focuses on a very technical and constantly changing area of federal billing regulations," according to the Mercy statement. "All patients were billed correctly for services received and those services were medically necessary and delivered appropriately."
Mercy also said it's important to note that it was actively working to save the government money during that same time as one of a handful of health systems involved in the Medicare Physician Group Practice Demonstration (PGP), which aimed to better coordinate care and improve health outcomes while controlling costs. Mercy has since become an accountable care organization, focused on keeping patients healthier to lower costs, it said.
Mercy Health Springfield Communities, formerly known as St. John's Health System, operates a hospital in Springfield and Mercy Clinic Springfield Communities, formerly known as St. John's Clinic, owns and operates medical offices in southwest Missouri.
The settlement stems from a lawsuit filed by a whistle-blower, Dr. Jean Moore, a physician employed by Mercy Clinic Springfield Communities with staff privileges at the hospital. Moore alleged that clinic doctors received extra money based on a formula that improperly took into account the value of physicians' referrals.
The lawsuit alleged those actions violated the Stark law, which governs financial relationships between physicians and other providers. That, in turn, led to tainted Medicare claims.
Whistle-blowers in successful False Claims Act lawsuits are entitled to a share of whatever amount of money is recovered. Moore will receive $825,000.
