SightLine Health allegedly formed leasing companies and distributed the profits that its physician-investors generated by referring cancer patients for radiation therapy.
A Houston-based radiation therapy chain will pay the federal government $11.5 million to settle a False Claims Act suit alleging that they paid physicians kickbacks to draw referrals, the Department of Justice said.
Prosecutors said SightLine Health LLC, which was acquired by Oncology Network Holdings LLC in 2011, allegedly enticed physicians to refer patients to its cancer treatment centers, and paid those physicians a share of its profits.
Specifically, prosecutors alleged that SightLine formed several leasing companies that referring physicians bought into. SightLine then distributed the profits that its physician-investors generated by referring cancer patients for radiation therapy.
"Investment arrangements that are structured to improperly compensate physicians for referrals can encourage physicians to make decisions based on financial gain rather than the best interest of their patients," said Acting Assistant Attorney General Chad A. Readler in DOJ's Civil Division.
"As the professionals charged with recommending and referring medical procedures for our community, physicians' primary motivation must remain the well-being of their patients," said U.S. Attorney Erin Nealy Cox. "Today's settlement demonstrates our determination to eliminate complex business ventures that improperly interpose financial considerations into our physicians' medical judgment."
In addition to the settlement, ION and SightLine have entered into a five-year corporate integrity agreement with the federal auditors that will monitor relationships between ION and SightLine and referring physician investors.
The whistleblower who prompted the suit was not identified by DOJ, but that person will receive a $1.75 million share of the settlement.
SightLine, which operates nine radiation clinics in five states, did not return calls Friday morning seeking comment.
John Commins is a senior editor at HealthLeaders.