On May 24, the Department of Justice announced that Massachusetts Eye and Ear Infirmary, Massachusetts Eye and Ear Associates, Inc., and the Foundation of the Massachusetts Eye and Ear Infirmary, Inc. (Massachusetts Eye and Ear) agreed to pay over $5.7 million to resolve alleged False Claims Act (FCA) violations.
Acting U.S. Attorney Joshua Levy commended Massachusetts Eye and Ear for its cooperation in the case: “We applaud Massachusetts Eye and Ear … this settlement agreement demonstrates the advantages that actors can enjoy when they disclose non compliance, and we encourage others in the health care industry to come forward when they suspect wrongdoing.” He also emphasized the high stakes to consumers that are involved in these dealings: “Stark Act violations drive up the overall costs of the health care system due to fraud and abuse … We will continue to vigorously investigate False Claims Act violations arising out of improper financial relationships between hospitals and physicians.”
The allegations revolve around 44 physicians who the government claims violated the Physician Self-Referral Law (commonly known as the Stark Law). According to the Office of Inspector General, the Stark Law prohibits physicians from referring patients to receive “designated health services” payable by Medicare or Medicaid from entities with which the physician or an immediate family member has a financial relationship, unless an exception applies.
The alleged violations were brought to the government’s attention by an unnamed whistleblower in the case who filed a civil suit under the qui tam provision of the FCA. Qui tam claims enable private citizens to file lawsuits on behalf of the government if they know of an individual or company defrauding the government. Qui tam whistleblowers are eligible to receive between 15 and 30% of the government’s recovery. The whistleblower in this case will receive 17% of the final amount recovered, in addition to $375,000 for expenses and attorneys’ fees.
The Office of Inspector General’s office sees this case as a significant deterrent to future violators. “This settlement is a warning to other health care entities that seek to boost their profits by entering into improper financial arrangements with referring physicians,” said Phillip M. Coyne, Special Agent in Charge of the Department of Health and Human Services, Office of Inspector General (HHS-OIG). “Working with our law enforcement partners, we will continue to investigate such deals to prevent financial arrangements that could undermine impartial medical judgement, drive up health care costs, and corrode the public’s trust in the health care system.”
