Tuesday, August 25, 2009

Covenant Medical Center settles FCA suit

The U.S. Dept. of Justice announced that Covenant Medical Center will pay $4.5 million to settle a False Claims Act suit.

The suit alleged that Covenant violated the Stark Law, which prohibits a hospital from profiting from referrals of patients made by a physican with whom the hospital has an improper compensation arrangement. In this instance the government alleged that Covenant paid five physicians who referred their patients to Covenant compensation that was far above fair market value.