Catholic Medical Center agrees to resolve kickback allegations by paying $3.8M

Catholic Medical Center will pay $3.8 million to settle allegations that it violated the civil False Claims Act by providing free call coverage services to an off-duty cardiologist as a way to generate more patient referrals.

Catholic Medical Center paid its own cardiologists to cover another cardiologist's patients while she was away on vacation or otherwise unavailable in exchange for referrals to its New Hampshire-based center for additional care, the U.S. asserted in the settlement agreement.

Instead of charging the cardiologist for its services, the center received kickbacks in the form of millions of dollars of referrals for medical procedures which were submitted as claims to Medicare, Medicaid and other federal healthcare programs, U.S. Attorney John Farley said in a news release.

"The False Claims Act and the Anti-Kickback Statute protect patients and federal healthcare programs from fraud and abuse by removing the corrupting influence of money," Farley said. "When patients are referred for medical services, those referrals should be based solely on medical need and not affected by financial considerations."

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Although Catholic Medical Center denies allegations that its call coverage arrangement—which is no longer in place—violated federal law, the center agreed to settle to avoid the expenses of civil litigation, said Lauren Collins-Cline, spokesperson for Catholic Medical Center, in a statement.

"CMC holds itself to the highest ethical standards in patient care and business conduct," Collins-Cline said. "That's embedded in our mission, and will always remain our highest priority."

"Today's settlement sends a clear message that these types of financial arrangements will not be tolerated," said Phillip Coyne, special agent in charge for the U.S. Department of Health and Human Services, Office of Inspector General, in a news release. "We will continue to work with our law enforcement partners to ensure that all medical providers properly follow healthcare rules and regulations."

The civil lawsuit against Catholic Medical Center was originally filed under the False Claims Act by whistleblower Dr. David Goldberg, a former employee of the center. As part of the settlement, Goldberg is set to receive a portion of the settlement amount.