Methodist Le Bonheur Healthcare paid $7.25 million to settle kickback allegations brought by the former president of Methodist University Hospital.
Memphis, Tennessee-based Methodist allegedly paid West Clinic, a physician group of oncologists and other specialists based in Memphis, for Medicare beneficiary referrals. The allegations stem from a federal whistleblower lawsuit filed in 2017 by Jeffrey Liebman, former president of Methodist University Hospital, and David Stern, former dean of the University of Tennessee Health Science Center. The federal government intervened in the whistleblower lawsuit in 2022.
Related: DOJ joins Methodist Le Bonheur kickback lawsuit
The alleged kickbacks—which took place from 2011 to 2019, when the system's affiliation with West Clinic ended—were financed in part by 340B drug discount program savings, according to the complaint.
A Methodist spokesperson said in a statement that the settlement is less than 3% of the original amount sought and that the settlement does not determine liability. The agreement does not include third-party oversight, “underscoring the organization’s contention that the suit was without merit,” the spokesperson said.
The $7.25 million settlement amounts to approximately 0.4% of Methodist’s 2022 annual revenue of $1.89 billion.
