West Virginia Hospital Agrees to Pay $50 Million to Settle Allegations Concerning Improper Compensation to Referring Physicians
WASHINGTON – Wheeling Hospital, Inc., an acute care hospital located in Wheeling, West Virginia, has agreed to pay the United States a total of $50,000,000 to resolve claims that it violated the False Claims Act by knowingly submitting claims to the Medicare program that resulted from violations of the Physician Self-Referral Law and the Anti-Kickback Statute, the Justice Department announced today.
The Physician Self-Referral Law, commonly known as the Stark Law, prohibits a hospital from billing Medicare 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 Anti-Kickback Statute prohibits offering or paying remuneration to induce the referral of items or services covered by Medicare, Medicaid, and other federally funded programs. Both the Stark Law and the Anti-Kickback Statute are 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.
"Improper financial arrangements between hospitals and physicians can influence the type and amount of health care that is provided," said Acting Assistant Attorney General Jeffrey Bossert Clark of the Department of Justice’s Civil Division. "The department is committed to taking action to eliminate improper inducements that can corrupt the integrity of physician decision-making."
In this case, the United States alleged that, from 2007 to 2020, under the direction and control of its prior management, R&V Associates, Ltd. and Ronald Violi, Wheeling Hospital systematically violated the Stark Law and Anti-Kickback Statute by knowingly and willfully paying improper compensation to referring physicians that was based on the volume or value of the physicians’ referrals or was above fair market value.
"Medicare and Medicaid beneficiaries trust that their healthcare providers will make decisions based on sound medical judgment," said Scott W. Brady, U.S. Attorney for the Western District of Pennsylvania. "Our office will take decisive action against any medical providers which betray that trust and make medical decisions based on their own financial interests. Our seniors deserve nothing less."
"Our office is committed to ensuring that health care providers in the Northern District of West Virginia abide by the law," said Bill Powell, United States Attorney for the Northern District of West Virginia. "We are pleased this settlement will enable Wheeling Hospital to resolve these prior False Claims Act violations and continue to provide a full range of healthcare services to patients in the area."
"Improper inducements made to physicians can interfere with medical decision-making and undermine the public’s trust in the health care system," said Special Agent in Charge Maureen R. Dixon of the Department of Health and Human Services Office of Inspector General. "Our agency will continue to investigate those who seek to improperly enrich themselves at the expense of public safety and federal health care programs."
The settlement announced today stems from a whistleblower complaint filed in 2017 by a former Executive Vice President of Wheeling Hospital, Louis Longo, pursuant to the qui tam provisions of the False Claims Act, which permit private persons 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 it did in this case as to some of Longo’s allegations. Longo will receive $10,000,000 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 800-HHS-TIPS (800-447-8477).
This matter was handled on behalf of the government by the Justice Department’s Civil Division, the U.S. Attorney’s Offices for the Western District of Pennsylvania and Northern District of West Virginia, the Department of Health and Human Services Office of the Inspector General, and the Federal Bureau of Investigation.
The case is captioned United States of America ex rel. Louis Longo v. Wheeling Hospital, Inc. et al., No. 19-cv-192 (N.D.W. Va.). The claims resolved by this settlement are allegations only and there has been no determination of liability.