Centra Health Inc. and Blue Ridge Ear, Nose, Throat and Plastic Surgery, Inc. have agreed to pay the government $9,345,845 to settle claims alleging they violated the False Claims Act and the Virginia Fraud Against Taxpayers Act by engaging in improper financial relationships. Centra and its affiliates are nonprofit corporations operating hospital facilities in the Lynchburg-area including Southside Community Hospital, Virginia Baptist Hospital, and Lynchburg General Hospital. Blue Ridge ENT is a physician practice group in Lynchburg that refers patients to Centra’s hospital system. The settlement involved financial relationships Centra and its affiliates had with several referring physicians and groups including Blue Ridge ENT in violation of the Stark Law, the Anti-Kickback Law, and other federal regulations that restrict the financial relationships hospitals may have with physicians who refer patients to them. Centra proactively came forward, self-disclosed its violations of the False Claims Act, and worked with the government to resolve these issues.
As part of the settlement, Centra identified physician recruitment agreements with physicians who had already relocated to south-central Virginia, physician employee compensation arrangements that took into account the value of referrals for in-office laboratory tests, financial arrangements with physicians that were not memorialized in a written and executed contract, and agreements with trauma call coverage physicians and an oncology practice that did not satisfy any exception to the Stark Law. Blue Ridge ENT allegedly had a financial relationship with Centra to guarantee income to one of its physicians where Centra agreed to reimburse Blue Ridge ENT for actual additional incremental costs attributed to that physician. Blue Ridge ENT, however, knowingly claimed and received reimbursement beyond what would be allowed by the Stark Law and the Anti-Kickback Law. These allegations were brought in a lawsuit filed by a former Blue Ridge ENT physician under the qui tam provisions of the False Claims Act, which permit private individuals to sue on behalf of the government and share in any recovery.
