South Carolina's Lexington Medical Center has agreed to a $17 million settlement over allegations that it paid 28 physicians unreasonably high amounts in exchange for referrals.
A whistle-blower and the federal government alleged that Lexington acquired physician practices and then paid the doctors “commercially unreasonable compensation” with the expectation that they would make referrals to Lexington.
Lexington, a 416-bed hospital in West Columbia, S.C., has denied any wrongdoing and said the settlement allows it to avoid “continued costly litigation that could have lasted for several years.”
The government alleged that Lexington's actions violated the Stark law, which prohibits doctors from referring Medicare patients to hospitals, labs and other doctors that the physicians have financial relationships with unless they fall under certain exceptions.
Many have criticized the Stark law as overly complex and confusing, and a Senate committee held a hearing this month on the issue after releasing a white paper that said the Stark law has created “a minefield for the healthcare industry.”
