Massachusetts Eye and Ear Agrees to Pay Over $5.7 Million to Resolve False Claims Act Allegations

BOSTON – Massachusetts Eye and Ear Infirmary, Massachusetts Eye and Ear Associates, Inc., and the Foundation of the Massachusetts Eye and Ear Infirmary, Inc. (collectively “Massachusetts Eye and Ear”) have agreed to pay over $5.7 million to resolve allegations that seven of their physician compensation plans, involving 44 doctors, violated federal law.

The government alleges that Massachusetts Eye and Ear compensated 44 physicians in a manner that violated the Physician Self-Referral Law (sometimes referred to as the Stark Law). Mass General Brigham, which has owned and operated Massachusetts Eye and Ear since April 2018, disclosed this issue to the government in connection with the government’s investigation into related allegations. The Stark Law prohibits physicians from referring patients to receive “designated health services” payable by Medicare from entities, like hospitals, with which the physician has a financial relationship, unless the arrangement falls into the exceptions provided for by law. It also prohibits the entity from billing Medicare for those services. The law is intended to ensure that physicians’ medical judgments are not compromised by improper financial inducements.  

“Stark Act violations drive up the overall costs of the health care system due to fraud and abuse,” said Acting United States Attorney Joshua Levy. “We will continue to vigorously investigate False Claims Act violations arising out of improper financial relationships between hospitals and physicians. We applaud Massachusetts Eye and Ear for its cooperation with the Department’s investigation. This settlement agreement demonstrates the advantages that actors can enjoy when they disclose non compliance, and we encourage others in the health care industry to come forward when they suspect wrongdoing.” 

“This settlement is a warning to other health care entities that seek to boost their profits by entering into improper financial arrangements with referring physicians,” said Phillip M. Coyne, Special Agent in Charge of the Department of Health and Human Services, Office of Inspector General (HHS-OIG). “Working with our law enforcement partners, we will continue to investigate such deals to prevent financial arrangements that could undermine impartial medical judgement, drive up health care costs, and corrode the public’s trust in the health care system.”

“We all rely on our health care providers to make treatment decisions based on clinical needs, not financial ones arising out of improper relationships between physicians and hospitals,” said Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division. “Today’s settlement with Massachusetts Eye and Ear demonstrates the FBI’s ongoing commitment to ensure that publicly funded health care programs to which we all contribute and on which we all depend are not abused.”

All seven physician compensation models at issue began before Mass General Brigham acquired Massachusetts Eye and Ear. One physician compensation model ended before Mass General Brigham took control of Massachusetts Eye and Ear. Mass General Brigham voluntarily terminated the remaining six physician compensation models on Oct. 1, 2019.  

The government’s investigation was prompted by False Claims Act allegations brought in a lawsuit filed by a whistleblower under the qui tam provisions of the False Claims Act. Under those provisions, a private party can file an action on behalf of the government and share in any recovery. In connection with today’s settlement, the whistleblower will receive 17% of the recovery. 
 
Acting U.S. Attorney Levy; HHS-OIG SAC Coyne; FBI SAC Bonavolonta; and Christopher Algieri, Special Agent in Charge of the U.S. Department of Veterans Affairs Office of Inspector General, Northeast Field Office made the announcement today. Assistant U.S. Attorneys Steven Sharobem and Charles B. Weinograd of Levy’s Affirmative Civil Enforcement Unit handled the matter.