Penn Highlands Healthcare—a Pennsylvania not-for-profit corporation operating a hospital system in north, central, and western Pennsylvania—and several of its hospitals—including Penn Highlands DuBois, formerly known as DuBois Regional Medical Center—(together “Penn Highlands”) have agreed to pay the United States $735,000 to resolve a lawsuit alleging False Claims Act infringement through the submission of claims to Medicare and Medicaid resulting from violations of the Physician Self-Referral Law. The Physician Self-Referral Law, commonly known as the Stark Law, prohibits a medical provider from billing Medicare or Medicaid for certain services referred by physicians with whom the hospital has a financial relationship, unless that relationship satisfies one of the law’s statutory or regulatory exceptions. The Stark Law is intended to ensure that medical decision-making is not compromised by improper financial incentives and is instead based on the best interests of the patient.
In this case, the United States alleged that, from July 1, 2009, through June 30, 2012, Penn Highlands DuBois violated the Stark Law by paying improper compensation to referring physician Gary Ott, MD, and to a physician employed by Women’s Care of Pennsylvania, Dr. Ott’s practice, in the amount of $420,000 under a Consulting, Medical Director, and Related Services Agreement for “employment services” allegedly performed before the agreement went into effect, during which time neither physician was employed by Penn Highlands DuBois.
