Department of Justice Seal Department of Justice
FOR IMMEDIATE RELEASE
FRIDAY, DECEMBER 20, 2002
WWW.USDOJ.GOV
CIV
(202) 514-2007
TDD (202) 514-1888

JUSTICE DEPARTMENT ANNOUNCES SETTLEMENTS

With South Dakota Hospital And Doctors For $6,525,000


WASHINGTON, DC Rapid City Regional Hospital has agreed to pay the United States $6 million to resolve allegations that the facility improperly charged Medicare for referrals from doctors with whom it had improper financial relationships, the Justice Department announced today. The doctors have agreed to pay the government an additional $525,000 to settle claims that they overcharged Medicare for their patients' office visits.

42 U.S.C. 1395nn, commonly known as the "Stark Statute," prohibits hospitals from billing Medicare for patient referrals from physicians with whom the hospitals have certain types of financial relationships. The case being settled today alleged that the Rapid City, South Dakota hospital improperly billed Medicare for referrals from a group of oncologists, Oncology Associates. Additionally, the settlement announced today covered claims that Oncology Associates, also based in Rapid City, used the wrong billing code when billing Medicare for its patients' office visits.

The settlement stems from a qui tam or whistleblower lawsuit filed by Karen Johnson-Pochardt, an employee of the hospital's Cancer Care Institute. Under the False Claims Act, private citizens can bring suit on behalf of the government and receive a share of any awards that are obtained through that legal action. Ms. Johnson-Pochardt will receive between 15 and 25% of the Government's recovery in this case.

The government's investigation was conducted by the Civil Division of the Department of Justice; the United States Attorney's Offices for the District of South Dakota; and the Office of Inspector General of the Department of Health and Human Services.

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