Texas-Based Heart Hospital Agrees To $48 Million Settlement For Alleged Violations Of Anti-Kickback Statutes

On December 18, Texas Heart Hospital of the Southwest LLP and its subsidiary THHBP Management Company, LLC (collectively THH) agreed to pay a settlement of $48 million to the U.S. government for knowingly submitting false claims through the Medicare program that allegedly violated the Anti-Kickback Statute. According to a U.S. Department of Justice (DOJ) press release, the qui tam lawsuit was brought by two whistleblowers who were former physicians and partial owners of THH. The government alleges that THH illegally required physicians to contact or refer 48 patients a year in order to keep their partial ownership of THH. A contract that requires or incentivizes physicians to bring in or keep a quota of patients to a hospital would violate the Stark Act and the Anti-Kickback Statutes of the False Claims Act.

The DOJ claims that THH contractually required inappropriate relationships between physicians and the hospital by connecting patient contacts with financial incentives. Acting Assistant Attorney General Jeffrey Bossert Clark stated in the press release that “Inappropriate financial relationships between health care providers and their referral sources can distort physician decision-making and drive up health care costs for everybody.” The DOJ has recently announced a number of other settlements involving inappropriate physician/hospital relationships revealed by whistleblower lawsuits similar to this one, including the Doctor’s Choice Home Care settlement, the Merit Medical Systems settlement, and the Wheeling Hospital kickback settlement. Each of these lawsuits were uncovered by whistleblowers and alleged the existence of large kickback or illicit remuneration programs. 

Whistleblowers Mitchell Magee, M.D. and Todd Dewey, M.D. were physicians who owned part of THH when they filed the whistleblower lawsuit that resulted in the settlement. In this case, the government declined to take over the lawsuit for the whistleblowers, but under the qui tam provisions of the False Claims Act, they were able to continue with the suit on their own, eventually resulting in the $48 million settlement. Under the False Claims Act, whistleblowers are financially incentivized to step forward when they experience fraud with a required 10 to 30% share of the final amount that the company will pay in fines and disgorgement to the government. Magee and Dewey will receive $13,920,000 for their part in bringing the case which they will share. 

Read the DOJ’s press release here.

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