A whistleblower lawsuit alleged that UPMC Hamot paid a cardiology group $2 million a year to secure patient referrals. The alleged scheme occurred before Hamot was affiliated with UPMC.
A University of Pittsburgh hospital in Erie, PA and a nearby cardiology practice will pay $20.75 million to resolve kickback allegations made in a whistleblower lawsuit, the Department of Justice said Wednesday.
Federal prosecutors said that UPMC Hamot and the regional cardiology group Medicor Associates Inc. submitted claims to Medicare and Medicaid that they knew violated Anti-Kickback Statutes and the Stark Law on physician self-referrals.
Hamot, a 424-bed tertiary care facility, regional referral hub and Level II Trauma Center, became affiliated with UPMC in February, 2011, after the alleged violations occurred.
UPMC is not commenting on the settlement, a spokesperson said Wednesday.
The whistleblower suit that prompted the settlement claimed that, from 1999 to 2010, Hamot paid Medicor up to $2 million per year under 12 physician and administrative services arrangements which were created to secure Medicor patient referrals. Hamot allegedly had no legitimate need for the services contracted for, and in some instances the services either were duplicative or were not performed, DOJ said.
"Financial arrangements that improperly compensate physicians for referrals encourage physicians to make decisions based on financial gain rather than patient needs," Acting Assistant Attorney General Chad A. Readler said in a media release.
The lawsuit was filed by Tullio Emanuele, MD, who worked for Medicor from 2001 to 2005, and who will receive $6 million of the settlement.
John Commins is a senior editor at HealthLeaders.