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Detroit Area Hospital Settles False Claims Act Case for $84.5 Million

William Beaumont Hospital, a hospital based in the Detroit area, agreed to pay $84.5 million to settle claims under the False Claims Act. The hospital was accused of having improper relationships with eight referring doctors that resulted in submitting false claims to Medicaid, Medicare and TRICARE.

The Anti-Kickback Statute prohibits medical organizations and doctors from any type of offering, soliciting, paying or receiving kickbacks in return for referrals of services covered by these federally funded healthcare programs. The Stark Law is another crucial piece of legislation in this field, as it prohibits hospitals from billing Medicare for some services provided by doctors with whom the hospital has an improper financial relationship. This includes compensation above and beyond the fair market value of the services provided, or the provision of below-market (or free) office staff or rent

Serious healthcare fraud accusations

The specific allegations at play in this case were that from 2004 to 2012, Beaumont offered compensation far beyond market value in addition to free or cheap office space and employees to some doctors to obtain their patient referrals in a manner violating both the Stark Law and the Anti-Kickback Statute. The hospital then submitted claims for services it provided to these patients it obtained illegally, a practice that violates the terms of the False Claims Act.

In addition, Beaumont was alleged to have misrepresented that a CT radiology center could be considered an outpatient department of the hospital when submitting claims to federal health care programs. These allegations were also resolved as part of the settlement.

Of the money from the settlement, $82.74 million will go to the federal government and $1.76 million to the state of Michigan.

Healthcare fraud costs the United States billions of dollars every year, and in many circumstances it is only through the information provided by whistleblowers that these incidents are revealed. For more information on how to report wrongdoing within a healthcare organization, contact an experienced Dallas whistleblower lawyer with Kardell Law Group.

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