4 of the Biggest Stark Law Cases Settlements Ever Recorded

Stark’s Law is not to be taken lightly and some of the country’s largest health service providers have been hit hard by not adhering to its guidelines. While some of these providers try to enrich themselves illegally — often at the taxpayer's expense — there are many honest and brave citizens who are not scared to blow the whistle on them. These whistleblowers are unsung heroes, and they play a critical part in stifling corporate greed, especially in the medical field. Here are four Stark Law cases that resulted in some serious fines for the offenders.

Halifax Hospital Medical Center: $85 million

Halifax was accused of contravening Stark Law and the False Claims Act. According to Government allegations, the service provider entered into illegal contracts with six oncologists. These contracts included financial incentives connected to the value of prescription drugs and tests that the oncologists performed, and were billed by the company to Medicare.

The company was also accused of paying certain neurosurgeons above fair market value for their work and for admitting patients to hospital who did not need to be admitted, and, of course, billing Medicare for the related expenses. Their efforts resulted in them paying $85 million to resolve the allegations.

Adventist: $118.7 million

This was fraud on a grand scale and is one of the biggest healthcare-fraud settlements in the USA, in a case that involved physician referrals to hospitals.

A large part of that $118 million payout is focused on alleged unlawful activities by the Florida Hospital Medical Group (owned by Adventist), as well as their close to 35 hospitals in the sunshine state. No physicians were individually accused.

The allegations, which came via four whistle-blowers, include accusations of Adventist paying huge amounts to doctors with very generous tax benefits. This was part of their overall strategy to control physician referrals for medical services to Adventist’s hospitals in the region. There were also allegations that the health system presented fake claims based on these referrals in order to earn millions of dollars from Medicare and Medicaid reimbursements.

Adventist Health System settled the case and agreed to pay the U.S. government and four states, including Florida, $118.7 million.

Amedisys: $150 million

Amedisys, based in Los Angeles, is one of the largest providers of home health services in the USA. The initial lawsuit filed against this provider was done so under the qui tam, or whistleblower provision of the False Claims Act. It was brought forward by former employees of Amedisys.

The allegations stated that Amedisys submitted unlawful claims to Medicare for refunds from 2008 to 2010; this was for a range of nursing and therapy services that were deemed unnecessary (at least in medical terms), or for services provided to patients who were not homebound. There were additional allegations of improper financial relationships with referring physicians.

Amedisys agreed to settle and paid out $150 million to resolve the allegations.

Tuomey Healthcare System: $237 Million

In 2015, the U.S. Court of Appeals confirmed a $237 million judgment against Tuomey Healthcare System, a non-profit hospital in Sumter, Carolina. This is hopefully the last page of this long-running saga, which offers a word of warning to those health practitioners or businesses who do not maintain compliance at all times.

A federal district court initially found that Tuomey had contravened the Stark law. This was based on reports of physicians charging above what is considered fair market value, and in a manner that took their referrals into account. However, a jury concluded that Tuomey did not “knowingly” violate the Stark law, and therefore could not have intentionally submitted false claims. A district court revoked the jury’s verdict and ordered a new trial after it was discovered that crucial testimony had been excluded from the trial.

Tuomey did not fare any better in the second trial, and once again they were found guilty of knowingly violating Stark’s law and submitting false claims. The company tried to appeal the hefty fine the court sentenced them to pay, but it was not successful and Tuomey had to pay out.

What did Tuomey do?

Tuomey’s transgressions are centered around 19 part-time physician employment agreements entered into by surgeons on Tuomey’s staff. The company was hoping to persuade surgeons to perform surgery at Tuomey’s outpatient hospital surgeries, ensuring that the health service company receives the rather hefty fees generated by this service.

The interesting thing about these large settlements is that they all seem to have been settled out of court. Starks Law ís complicated and not easy to prosecute, but many successful prosecutions have resulted in billions paid back to the state, and serve as an expensive reminder to healthcare practitioners to stay compliant with the law at all times.

How do you report medicare fraud?

Start by finding an established law firm with experience in the field, and one that has the necessary resources to fight your case. The rewards can be large in qui tam claims but cases like these are difficult to process and fight, so choose your legal partners carefully. Coxwell Law has a solid track record in qui tam litigation and has the necessary tools to help you fight against fraudulent or illegal activities. If you believe you have evidence of misconduct and want to bring it to justice, you’ll need the right information and the best partners to help you. Download our in-depth guide to whistleblowing to learn what to expect, or contact us if you wish to find out more.

Disclaimer: This blog is intended as general information purposes only, and is not a substitute for legal advice. Anyone with a legal problem should consult a lawyer immediately.

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