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Press Release
Press Release
SHERMAN, Texas – Fifteen additional Texas doctors have agreed to pay a total of $2,831,280 to resolve False Claims Act allegations involving illegal kickbacks in violation of the Anti-Kickback Statute and Stark Law, and to cooperate with the Department’s investigations of and litigation against other parties, announced Eastern District of Texas U.S. Attorney Brit Featherston today.
“These settlements should reinforce the message that the Eastern District of Texas will not tolerate health care providers who seek to enrich themselves through kickback schemes,” said U.S. Attorney Brit Featherston. “We will continue to work with our agency partners to identify those who defraud our taxpayers and we will hold those who have engaged in the schemes responsible.”
The Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid, and other federally funded programs. The Stark Law forbids a hospital or laboratory from billing Medicare for certain services referred by physicians that have a financial relationship with the hospital or laboratory. The Anti-Kickback Statute and the Stark Law are intended to ensure that medical providers’ judgments are not compromised by improper financial incentives and are instead based on the best interests of their patients.
The settlements announced today resolve allegations that fifteen Texas doctors violated the Anti-Kickback Statute and the Stark Law by receiving thousands of dollars in remuneration from nine management service organizations (MSOs) in exchange for ordering laboratory tests from Rockdale Hospital d/b/a Little River Healthcare (Little River), True Health Diagnostics LLC (True Health), and/or Boston Heart Diagnostics Corporation (Boston Heart). Little River allegedly funded the remuneration to certain doctors, in the form of volume-based commissions paid to independent contractor recruiters, who used MSOs to pay numerous doctors for their referrals. The MSO payments to the doctors were allegedly disguised as investment returns but in fact were based on, and offered in exchange for, the doctors’ referrals.
As part of their settlements, the fifteen physicians have agreed to cooperate with the Department of Justice’s investigations of and litigation against other parties involved in the alleged violations of law.
“The Anti-Kickback and Stark Statutes help protect the integrity of federal healthcare programs,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “We will continue to pursue both individuals and corporations responsible for schemes that violate these important safeguards.”
“This outcome is the result of cooperation amongst law enforcement partners focused on upholding the integrity of federal healthcare programs,” said Miranda L. Bennett of the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG). “We will continue to pursue physicians engaging in improper financial relationships to ensure patients are receiving quality medical care.”
“Today’s announcement is another step forward by the Department of Defense, Office of Inspector General’s Defense Criminal Investigative Service (DCIS) and our law enforcement partners to protect the integrity of the military’s health care system, commonly known as TRICARE,” said Acting Special Agent in Charge Gregory P. Shilling of the DCIS Southwest Field Office. “We will continue to aggressively investigate and hold those accountable that take advantage of the U.S. Government and American taxpayers.”
“The VA Office of Inspector General actively investigates those in violation of the Stark Law and the Anti-Kickback Statute,” said Special Agent in Charge Jeffrey Breen of the South Central Field Office of the Department of Veterans Affairs Office of Inspector General (VA-OIG). “Today’s civil settlements demonstrate the VA OIG’s ongoing work to hold individuals accountable and protect the integrity of federal healthcare programs.”
Former True Health CEO Christopher Grottenthaler, former Boston Heart CEO Susan Hertzberg, former Little River CEO Jeffrey Madison, and others are defendants in a separate False Claims Act lawsuit in which the United States filed an amended complaint in May 2022. That pending case is captioned United States ex rel. STF, LLC v. True Health Diagnostics, LLC, et al., No. 4:16-cv-547 (E.D. Tex.). If a defendant is found liable for violating the act, the United States may recover three times the amount of its losses plus applicable penalties.
The civil settlements were the result of a coordinated effort between the U.S. Attorney’s Office for the Eastern District of Texas and the Civil Division’s Commercial Litigation Branch, Fraud Section, with assistance from HHS-OIG, DCIS, and VA-OIG. As a result of its efforts, the United States has recovered over $32 million relating to conduct involving Boston Heart, True Health, and Little River, including False Claims Act settlements with thirty-three physicians, two healthcare executives, and one laboratory. This matter and the related matters were handled by Assistant U.S. Attorneys James Gillingham, Adrian Garcia, and Betty Young, Senior Trial Counsel Christopher Terranova, and Trial Attorney Gavin Thole.
The government’s pursuit of these matters illustrates the government’s emphasis on combating healthcare fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services, at 1-800-HHS-TIPS (800-447-8477).
The claims resolved by the settlements are allegations only, and there has been no determination of liability.
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