West Virginia Hospital Settles False Claims Act Allegations of Kickback Scheme For $50 Million

A hospital in Wheeling, West Virginia, will pay $50 million to settle claims that they violated the Anti-Kickback Statute and the Physician Self-Referral Law. The settlement resolves a 2017 complaint made by whistleblower Louis Longo, a former Executive Vice President of the hospital. Wheeling Hospital allegedly offered remuneration to physicians in exchange for increased patient referrals, which they then charged to Medicare. Under the False Claims Act, companies can be liable to pay triple the damages that they allegedly cause taxpayers.

The government alleges that between 2007 and 2020, Wheeling Hospital knowingly violated both the Physician Self-Referral Law and the Anti-Kickback Statute by paying physicians based on the number of referrals they provided the hospital with. Longo’s complaint alleges that some physicians were receiving illicit compensation of more than $1 million a year. During this time period, Wheeling Hospital was under the supervision of R&V Associates Ltd., a business consulting firm based out of Pittsburgh. R&V Associates’ Chief Executive Officer, Ronald Violi, is also named in the complaint. He retired in 2019, after the complaint was unsealed.

Federal officials said that this settlement will help to discourage improper physician and hospital relationships in the future. “Improper inducements made to physicians can interfere with medical decision-making and undermine the public’s trust in the health care system,” Special Agent in Charge of the Department of Health and Human Services’ Office of the Inspector General Maureen R. Dixon said in the Department of Justice (DOJ) press release.

Other officials highlighted the negative effect that referral kickback schemes can have on seniors and the elderly. In some whistleblower cases, the government may step in and take over the prosecution of allegations that they feel are particularly strong. In this case, the government decided to intervene and take on some, but not all, of Longo’s claims. Under the False Claims Act’s qui tam provisions, whistleblowers are entitled to a share in the money recovered by the government. For his part in bringing the claim that ended in this settlement, Longo will receive a total reward of $10 million.

Read the Department of Justice press release here.

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