United States Attorney Henry C. Leventis announced that Methodist Le Bonheur Healthcare and Methodist Healthcare-Memphis Hospitals (“Methodist”) have paid $7,250,000 to resolve allegations that Methodist violated the False Claims Act. This settlement resolves allegations that Methodist caused the submission of false claims to Medicare that resulted from improper financial arrangements between Methodist and the West Clinic, PLLC (“the West Clinic”), including kickbacks that Methodist paid to the West Clinic as part of its affiliation with the West Clinic. In its complaint, the United States alleged that, from December 2011 until February 2019, Methodist had a multi-agreement affiliation with the West Clinic and the University of Tennessee Health Science Center. The affiliation agreements with the West Clinic included an Asset Purchase Agreement, Management Services Agreement, Leased Employee and Administrative Services Agreement, and Professional Services Agreement. According to the complaint, Methodist used these agreements as a vehicle to pay kickbacks to the West Clinic in part to induce the West Clinic to refer Medicare beneficiaries to Methodist. The affiliation ended in 2019 and is no longer ongoing.
