The Department of Justice announced that it reached a whistleblower kickback settlement under the False Claims Act with Medstar Health.

Hospital Kickback Allegations

Medstar Health Inc. and its fellow defendants are hospitals and medical centers. The allegations revolve around kickbacks. While kickbacks in many industries are legal, they are not in the healthcare industry. The Anti-Kickback Statute makes it illegal to pay anything of value for referrals of designated health services. The reason why it is harmful: kickbacks give doctors incentive to pursue necessary treatments that are costly and sometimes harmful to patients.

The Kickbacks

In this whistleblower kickback settlement the kickbacks were provided by the defendant, hospital, to a cardiology group. In exchange for the referrals of patients to the hospital, whereby the hospital performed lucrative hospital procedures. The kickbacks were hidden as “professional services agreements.”

The Whistleblowers

The whistleblowers who filed the case and reported the fraud that resulted in the whistleblower kickback settlement were cardiac surgeons. These whistleblowers practiced together as members of Cardiac Surgery Associates in Baltimore.

Whistleblower Kickback Settlement Case

The False Claims Act case was filed using the qui tam provisions by the whistleblowers in the District of Maryland in December 2012. The case settled for $35 million. The whistleblowers will receive a share of the recovery.

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