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Rush University Medical Center Settles $1.5M False Claims Suit

Les Masterson, for HealthLeaders Media, March 10, 2010

Chicago-based Rush University Medical Center has agreed to pay $1.5 million plus interest to resolve allegations that it violated the False Claims Act, according to the Justice Department.

The Justice Department alleged that Rush entered into leasing arrangements for office space with two physicians and three physician practice groups, which violated the Stark Law. The Stark Law forbids hospitals from "profiting from patient referrals made by a physician with whom the hospital has an improper financial arrangement," said the Justice Department.

Federal officials said a leasing arrangement without a written lease, signed by both parties, and without specifics about the premises covered by the lease is against the Stark Law.

"The Justice Department is committed to investigating cases that threaten the integrity of the Medicare program," said Tony West, assistant attorney general for the Justice Department's Civil Division. "The department will continue to protect patients by pursuing hospitals that have improper financial relationships with physicians."

The Justice Department said Rush is one of several defendants in a 2004 false claims whistleblower suit. The suite alleges that Rush "entered into prohibited financial relationships with certain physicians," said the Justice Department.

As part of the civil agreement, the two whistleblowers, Dr. Robert Goldberg and June Beecham, will receive $270,760.

The Justice Department said the settlement is part of a greater emphasis on combating healthcare fraud. The feds have recovered more than $3 billion since January 2009 in cases involving the False Claims Act.


Les Masterson is an editor for HealthLeaders Media.

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