VHS of Michigan Inc. Agrees to Pay over $29 Million to Settle False Claims Act Allegations

VHS of Michigan Inc., doing business as, The Detroit Medical Center Inc. (DMC), Vanguard Health Systems Inc. (Vanguard), and Tenet Healthcare Corporation (Tenet), have agreed to pay $29,744,065 to the government to resolve allegations that they violated the False Claims Act by providing kickbacks to certain referring physicians. DMC operates hospitals in and around Detroit, including Sinai Grace Hospital and Harper University Hospital. In October 2013, Tenet acquired Vanguard owned-and-operated hospitals and outpatient facilities, including DMC.

The settlement resolves the government’s allegations that DMC, Vanguard, and Tenet caused the submission of false or fraudulent claims to Medicare. Specifically, the government alleged that from Jan. 1, 2014, through Dec. 31, 2017, Sinai Grace Hospital and Harper University Hospital provided the services of DMC-employed mid-level practitioners to 13 physicians at no cost or below fair market value in violation of the Anti-Kickback Statute (AKS). The government further alleged that the physicians were selected because of their large number of patient referrals to Sinai Grace Hospital and Harper University Hospital and that the purpose of these arrangements was to induce the physicians to refer additional Medicare patients to DMC facilities.

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