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Press Release

Penn Highlands Healthcare to Pay $735,000 to Settle False Claims Act Allegations

For Immediate Release
U.S. Attorney's Office, Western District of Pennsylvania

PITTSBURGH, Pa. – Penn Highlands Healthcare—a Pennsylvania not-for-profit corporation operating a hospital system in north, central, and western Pennsylvania—and several of its hospitals—including Penn Highlands DuBois, formerly known as DuBois Regional Medical Center—(together “Penn Highlands”) have agreed to pay the United States $735,000 to resolve a lawsuit alleging False Claims Act infringement through the submission of claims to Medicare and Medicaid resulting from violations of the Physician Self-Referral Law, United States Attorney Eric G. Olshan announced today.

The Physician Self-Referral Law, commonly known as the Stark Law, prohibits a medical provider from billing Medicare or Medicaid for certain services referred by physicians with whom the hospital has a financial relationship, unless that relationship satisfies one of the law’s statutory or regulatory exceptions. The Stark Law is intended to ensure that medical decision-making is not compromised by improper financial incentives and is instead based on the best interests of the patient.

In this case, the United States alleged that, from July 1, 2009, through June 30, 2012, Penn Highlands DuBois violated the Stark Law by paying improper compensation to referring physician Gary Ott, M.D., and to a physician employed by Women’s Care of Pennsylvania, Dr. Ott’s practice, in the amount of $420,000 under a Consulting, Medical Director and Related Services Agreement for “employment services” allegedly performed before the agreement went into effect, during which time neither physician was employed by Penn Highlands DuBois.

The settlement stems from a whistleblower complaint filed in October 2016 by three medical providers formerly employed by Penn Highlands pursuant to the qui tam provisions of the False Claims Act, which permit private persons, also called relators, to bring a lawsuit on behalf of the government and to share in the proceeds of the suit. The Act also permits the government to intervene and take over the lawsuit, as the government did in this case in regard to some of the relators’ allegations. The relators will receive $154,350 as part of the settlement.

The United States’ intervention and settlement in this matter 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 (1-800-447-8477) or online at

This case was handled on behalf of the government by the U.S. Attorney’s Office for the Western District of Pennsylvania and the Department of Health and Human Services Office of Inspector General.

The case is captioned United States ex rel. Tuesdae Stainbrook, D.O., M.P.H., Mary Simpson, M.B.A., and Jonathan Pope, M.D. at Civil Action No. 1:16-cv-244. The claims resolved by this settlement are allegations only and there has been no determination of liability.

Updated May 28, 2024

False Claims Act