Erie, Penn.-based UPMC Hamot, which is owned by the University of Pittsburgh Medical Center, and Medicor Associates agreed to pay the government $20.75 million to settle claims that they formed a kickback scheme that delivered unnecessary care, the Justice Department announced Wednesday.
UPMC Hamot, which UPMC acquired after the alleged Stark Law violation, allegedly paid the regional physician cardiology practice Medicor up to $2 million per year from 1999 to 2010 under 12 physician and administrative services arrangements to secure Medicor patient referrals, according to the DOJ. Hamot allegedly had no legitimate need for the services billed to Medicare and Medicaid, and in some instances were duplicative or not performed.
"Financial arrangements that improperly compensate physicians for referrals encourage physicians to make decisions based on financial gain rather than patient needs," Chad Readler, acting assistant attorney general and head of the DOJ's civil division. "The Department of Justice is committed to preventing illegal financial relationships that undermine the integrity of our public health programs."
The lawsuit was filed by whistleblower Dr. Tullio Emanuele, who worked for Medicor from 2001 to 2005 and will receive more than $6 million.
In a March 15, 2017 ruling, the U.S. District Court for the Western District of Pennsylvania held that two of Hamot's arrangements with Medicor violated the Stark Law.
