Good afternoon. I’m pleased to be here today with the United States Attorney for the Southern District of Indiana, Zachary Myers, HHS Assistant Special Agent in Charge Tom Ethridge and FBI Assistant Special Agent in Charge Danny Youmara to announce a major health care fraud resolution.
Community Health Network, an Indiana non-profit health network headquartered in Indianapolis, has agreed to pay $345 million to resolve allegations that it violated the False Claims Act by knowingly submitting unlawful claims to Medicare. The claims were for services referred by physicians to whom Community paid salaries that were well above fair market value or bonuses based on the number of their referrals. These claims were prohibited by a federal statute called the Stark Law. Today’s result is the largest False Claims Act settlement based on Stark Law violations in the history of the Department of Justice.
The False Claims Act is the government’s primary civil tool for fighting fraud involving taxpayer funds, including fraudulent schemes affecting federally funded health care programs like Medicare and Medicaid. Since the False Claims Act was substantially amended in 1986, health care fraud recoveries under the Act have exceeded $53 billion, and during just the past fiscal year, the department recovered more than $2 billion in health care fraud matters.
An important focus of our health care fraud enforcement efforts has been to ensure compliance with the Physician Self‑Referral Law, commonly known as the Stark Law. The Stark Law prohibits a hospital from billing Medicare for certain services referred by a physician who has a financial relationship with the hospital, unless that relationship satisfies one of the law’s statutory or regulatory exceptions. The Law is intended to ensure that medical decision-making by physicians is not compromised by improper financial incentives and is instead based on the best interests of the patient.
The United States’ complaint against Community was filed here in the United States District Court for the Southern District of Indiana in January of 2020. The complaint alleged that Community violated the False Claims Act by knowingly billing for services referred by physicians with whom Community had financial relationships that did not fit within one of the Stark Law’s exceptions. Beginning in 2008, Community allegedly embarked on an aggressive campaign to recruit and employ certain physician specialists by paying them salaries that were above fair market value or by paying them bonuses based on the number of referrals they provided. These financial arrangements created incentives that could undermine the physicians’ clinical judgment when making referrals for services. The claims that Community submitted to Medicare for these services were ineligible for payment. The United States alleged that Community knew that the submission of claims to Medicare for these referrals would violate the Stark Law, but that it nevertheless submitted unlawful claims. As a result, the United States has alleged, Community was paid millions of dollars in Medicare reimbursements that it should never have received.
Today’s historic recovery follows several years of litigation. It demonstrates the Justice Department’s continued commitment to combatting health care fraud. We are focused on ensuring that physicians provide objective medical advice to their patients – advice that is not tainted by improper financial relationships. More generally, we will continue to use the False Claims Act to protect the integrity of federal health care programs and to prevent the waste and abuse of taxpayer funds.
I would like to thank U.S. Attorney Myers and his colleagues in the U.S. Attorney’s Office for their partnership on this case. I would also like to thank the dedicated attorneys in the Justice Department’s Civil Fraud Section for their hard work and leadership. I am equally grateful for the work of our partners at the Federal Bureau of Investigation and the Department of Health and Human Services and its Office of Inspector General. They have made invaluable contributions to this case and to our fraud enforcement efforts more broadly.
Now, it’s my pleasure to introduce the United States Attorney for the Southern District of Indiana, Zach Myers.