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Texas 'Heart Hospital' to Pay $48M in Alleged Kickback Settlement

Analysis  |  By Melanie Blackman  
   December 21, 2020

The partially physician-owned hospital allegedly required the physician owners “to satisfy the Heart Hospital's yearly 48 patient-contact requirement in order to maintain ownership in the hospital.”

Texas Heart Hospital of the Southwest, LLP and its wholly owned subsidiary, THHBP Management Company, LLC, have agreed to pay $48 million to the United States to resolve claims that the company violated the False Claims Act, the Department of Justice (DOJ) announced Friday.

The two organizations, collectively known as the "Heart Hospital" were alleged to have knowingly submitting claims to the Medicare program that “resulted from violations of the Physician Self-Referral Law and the Anti-Kickback Statute," the release stated.

Texas Health Hospital of the Southwest, LLP, a partially physician-owned hospital, allegedly required the physician owners "to satisfy the Heart Hospital's yearly 48 patient-contact requirement in order to maintain ownership in the hospital."

"Inappropriate financial relationships between health care providers and their referral sources can distort physician decision-making and drive up health care costs for everybody," Jeffrey Bossert Clark, Acting Assistant Attorney General of the DOJ’s Civil Division, said in a statement. "The department remains committed to ensuring that physicians act in the best interests of their patients rather than their pocketbooks."

Former physician owners Mitchell Magee, M.D. and Todd Dewey, M.D. filed a lawsuit against the Heart Hospital which led to the settlement and will collectively receive nearly $14 million as their share of the recovery.

"Although the business of healthcare continues to evolve, our mission remains the same—to ensure that medical decision making is based on patient care and free of influence by financial consideration," Stephen J. Cox, United States Attorney for the Eastern District of Texas, said in a statement. "We commend the whistleblowers and their counsel for uncovering this arrangement and pursuing the case to a point where Defendants and the United States were able to reach a resolution that both protects the taxpayer and ensures patient care, free from financial influence."

The settlement came a month after the Centers for Medicare and Medicaid Services (CMS) finalized a Stark Law overhaul, which with the exception of one provision, will take effect on January 1, 2022. Changes include exceptions for value-based arrangements, protection for beneficial arrangements, and offers additional guidance on requirements of the Physician Self-Referral Law.

Related: CMS Finalizes Stark Law Overhaul, AEH Praises Changes

Related: Extensive changes to Stark and Anti-Kickback regulations

Melanie Blackman is the strategy editor at HealthLeaders, an HCPro brand.


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