Northside hospital of Atlanta, Georgia, will pay $5.7 million to settle allegations that the hospital violated the False Claims Act. According to the suit, the hospital had improper financial and referral relationships with two-physician-owned etities. Those entities will pay $650,000 in settlement.
The hospital operates a clinical transplant program in affiliation with the Blood and Marrow Transplant Group of Georgia. The physicians who own that group also own a clinical laboratory that provides services and products to the hospital. These types of financial arrangements can violate the federal Stark Law, which (with some exceptions) prohibits physician referrals to entities with which they have a financial relationship. The hospital did not admit liability in the settlement.
The Atlanta Business Chronicle reported on the settlement on October 20, 2006