Adventist Health Reaches Huge Fraud Settlement
In what is being called the largest settlement ever reached in a health care fraud case relating to hospitals’ relationship with doctors, Adventist Health System has agreed to settle the claims for $118.7 million. The fraud claims stem from a white-collar lawsuit alleging the hospital violated a federal law that limits the financial relationships between hospitals and the doctors who refer patients to them. This law, known as the Stark Law, is intended to limit fraud and the overuse of government health services like Medicare and Medicaid.
Adventist, which is based in Altamonte Springs, was accused of utilizing lax billing practices with limited oversight, and paying huge amounts of money and offering lavish benefits to doctors who referred patients for inpatient and outpatient services to Adventist hospitals. The alleged kickbacks paid by the hospitals came in the form of inflated salaries, extravagant bonuses, expensive cars, overbilling of claims, and filing of false claims. Millions of dollars in Medicaid/Medicare reimbursements were allegedly lost to this scheme.
Under the terms of the settlement, Adventist will pay $115 million to the federal government (under the False Claims Act) and a total of $3.5 million to Florida, North Carolina, Tennessee, and Texas (states where accused hospitals are located). Almost three dozen of these hospitals are located in Florida as part of the Florida Hospital Medical Group. The whistleblowers who filed the claims against Adventist are also entitled a percentage of the settlement, typically 15 to 25 percent. In addition to reaching the settlement, Adventist has vowed to improve its oversight and practices so that patients may continue to receive quality care.
It is important to note that by reaching a settlement, Adventist is not admitting to any guilt as to the health care fraud and kickback claims. But such a large settlement is indicative of how much evidence was likely mounted against the company, especially against the multiple Florida hospitals. By reaching the settlement, the hospital system eliminates the risk of a public trial or the stain of a guilty verdict. It is a smart move, especially if the evidence was mounting against them. This tactic works not just in the case of big hospital systems, but for smaller hospital groups accused of healthcare fraud.
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