St. Francis to Pay the United States $36.5 Million to Settle Allegations Under the False Claims Act

Columbia, South Carolina --- St. Francis Physician Services, Inc., St. Francis Hospital, and Bon Secours St. Francis Health System, Inc., (collectively, “St. Francis”), owner and operator of the St. Francis healthcare system, a Section 501(c)(3) charitable organization in Greenville, South Carolina, has agreed to pay $36.5 million to resolve allegations that it violated the False Claims Act, the Federal Stark Law, and the Federal Anti-Kickback Statute (“AKS”) by making payments to orthopedic surgeons that were tied to the volume or value of referrals. 

The settlement resolves allegations that St. Francis caused the submission of false claims to Medicare and to TRICARE as a result of an unlawful contractual payment structure between St. Francis and Piedmont Orthopedic Associates (“POA”), whereby POA’s compensation was tied to the volume or value of the practice’s referrals to St. Francis. Specifically, it is alleged that St. Francis’s bonus payments to POA physicians violated both the Stark Law and the AKS.

“Medical providers should base health care decisions on what is best for the patient, and not on financial incentives and related schemes,” said U.S. Attorney Adair F. Boroughs for the District of South Carolina. “We are grateful the relator brought these allegations forward. Relators are critical to identifying fraud and protecting the integrity of our Medicare system.”

The settlement resolves a lawsuit originally brought by a relator under the qui tam, or whistleblower, provisions of the False Claims Act. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. As part of this resolution, the relator will receive approximately $10.2 million of the settlement amount. The whistleblower in this case was represented by Bill Nettles and Fran Trapp of the Law Offices of Bill Nettles, and Bryan Vroon of the Law Offices of Bryan A. Vroon, LLC. 

The lawsuit resolved by this settlement is captioned United States of America, et al., ex rel. Lee v. Bon Secours St. Francis Health System, Inc., Case No. 6:18-cv-01932-DCC (D.S.C.). The claims resolved by the settlement are allegations only, and there has been no determination of liability.

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