Health Care System, Corporate Entities To Pay $4.735 Million to Settle Government’s Allegations

Doctor's stethoscope lying on a pile of 100 dollar bills

Steward Health Care System LLC (Steward), along with a number of corporate entities, will pay $4.735 million to resolve allegations that it violated the False Claims Act. The settlement “resolves Steward’s self-disclosures and allegations originally brought by a lawsuit” that whistleblowers filed under the False Claims Act’s qui tam provisions, according to the U.S. Department of Justice’s (DOJ) press release. The whistleblowers in this case, two of whom are doctors, will be awarded 17% of the government’s recovery.

The qui tam provisions of the False Claims Act 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, if one occurs. 

“Steward is one of the largest, private for-profit health care networks” in the U.S., according to the DOJ press release. It also owns several hospitals in Massachusetts and “owns and operates Steward Good Samaritan Medical Center, Inc. (GSMC), a for-profit hospital in Brockton.” The settlement agreement states the whistleblowers alleged “Steward submitted or caused the submission of false claims for payment” to Medicare and Medicaid “by submitting or causing the submission of claims that were tainted by violations of the Anti-Kickback Statute…or the Stark Law.” The whistleblowers also named “the Additional Steward Entities” in their qui tam action.

The settlement agreement states that “Steward admits, acknowledges, and accepts its responsibility” for facts explained in the document. One fact is that in March of 2019, “Steward disclosed to the United States and the Commonwealth [of Massachusetts] that Steward had ‘failed to charge the proper rent’ on some leases that it had with physicians, physician organizations, and non-physician organizations.” According to the document, the company “disclosed that it did not accurately charge rent to these various organizations and, as a result, may have violated the [Anti-Kickback Statute] or the Stark Law.

Additionally, Steward “admits, acknowledges, and accepts its responsibility” for other facts, including that in January 2020, it disclosed to the U.S. and Massachusetts “that GSMC had a compensation arrangement with Dr. Bahige Asaker that may have violated the AKS.” According to the settlement agreement, Steward “entered into a compensation arrangement with Dr. Asaker pursuant to which Dr. Asaker agreed to serve as GSMC’s Medical Director of Post-Acute Care Services” in October 2010. “The agreement described the services, including various administrative services related to coordinating geriatric services in nursing homes and assisted living facilities in the GSMC services area.”

According to the settlement agreement, “GSMC paid Dr. Asaker ostensibly pursuant to the compensation arrangement from November 6, 2010 to June 23, 2016. Dr. Asaker did not submit timesheets or other documentation to demonstrate that he performed the services required under his compensation arrangement and Steward has been unable to confirm that Dr. Asaker performed the services. During the period of the payments, Dr. Asaker referred patients to GSMC.”

Steward also “admits, acknowledges, and accepts its responsibility” for facts related to Brockton Urology Clinic. According to the settlement agreement, “GSMC entered into an Administrative Services Agreement with Brockton Urology Clinic…dated May 1, 2011.” As part of the agreement, Brockton Urology was to “provide a physician to serve as the director of a ‘Prostate Cancer Program” at GSMC. Brockton Urology was supposed “to administer a ‘Prostate Cancer Center of Excellence’ at GSMC.” However, “as of at least January 2012, GSMC has had no Prostate Cancer Center of Excellence. Brockton Urology did not provide the services specified in the Administrative Services Agreement” — even though “from April 2011 through December 2017, GSMC paid Brockton Urology purportedly under the agreement.” The document states that during this time frame, “Brockton Urology referred patients to GSMC.”

The DOJ reached a $100,000 settlement with Brockton Urology in February: the physician practice resolves “allegations that it violated federal health care laws resulting in false claims to Medicare.”

The DOJ’s press release from the Steward settlement states that GSMC “entered into a five-year Corporate Integrity Agreement with the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG).” The agreement “provides for an annual review of its financial arrangements for compliance with the Anti-Kickback Statute and the Stark Law by an Independent Review Organization.”

The Importance of Healthcare Whistleblowers

Whistleblowers are key to uncovering fraud and corruption in the healthcare industry: fraudulent schemes can be particularly harmful to patients and erode trust in the medical system. In Fiscal Year 2021, whistleblowers helped the DOJ recover $1.6 billion in settlements. The DOJ highlighted health care fraud as “the leading source of the department’s False Claims Act settlements and judgments.”

Read the press release here.

Read the settlement agreement here.

Read more False Claims Act/qui tam news on WNN.

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