The U.S. Attorney’s Office has filed a complaint under the False Claims Act against Steward St. Elizabeth’s Medical Center of Boston, Inc. (SEMC); Steward Medical Group, Inc. (SMG); and Steward Health Care System, LLC (Steward) alleging that they violated the Physician Self-Referral Law (commonly referred to as the “Stark Law”) and submitted and caused the submission of false claims and statements to the Medicare program. Steward – the owner of SMG and SEMC – is an integrated healthcare system and one of the largest, private, for-profit health care networks in the nation.
Congress enacted the Stark Law to protect against physicians’ financial relationships from impacting their medical decision-making for Medicare patients. Relevant to this case, the Stark Law prohibits a hospital from billing Medicare for services referred by a physician with whom the hospital has an improper compensation relationship. The Stark Law protects patients and the Medicare program from physicians’ financial relationships leading to unnecessary overutilization of services or increased costs.
In 2012, SMG recruited Dr. Agnihotri, a cardiac surgeon, to serve as the Chief of Cardiac Surgery at SEMC. The government alleges that the defendants recruited Dr. Agnihotri because they wanted to increase the number of cardiovascular surgeries at SEMC in Boston, as a means to grow their profits via reimbursement from Medicare and other insurers. The government’s complaint alleges that, from January 2013 through March 2022, SMG paid Dr. Agnihotri compensation that exceeded fair market value as well as incentive compensation that varied based on, and took into account, the volume or value of his referrals to SEMC. Specifically, the amount of incentive compensation that SMG allegedly paid to Dr. Agnihotri varied based on the number of surgeries that Dr. Agnihotri referred to SEMC. It is alleged that SMG paid Dr. Agnihotri approximately $4,868,500 in incentive compensation that it calculated by including as a variable the number of cases Dr. Agnihotri referred to SEMC. The complaint alleges that Dr. Agnihotri made referrals to SEMC in violation of the Stark Law and SEMC submitted over 1,000 claims to Medicare knowing that the claims for those referred services were not eligible for payment. As a result, Medicare mistakenly paid tens of millions of dollars to SEMC for false claims.
The government’s investigation was prompted by False Claims Act allegations brought in a lawsuit filed by a whistleblower, under the qui tam provisions of the False Claims Act.
If you have information regarding false claims having been submitted to Medicare, Medicaid, TRICARE, other federal health care programs, or to other federal agencies/programs, and the information is not publicly known and no actions have been taken by the government with regard to recovering the false claims, you should promptly consult with a False Claims Act attorney (also known as qui tam attorneys) in your U.S. state who may investigate the basis of your False Claims Act allegations and who may also assist you in bringing a qui tam lawsuit on behalf of the United States, if appropriate, for which you may be entitled to receive a portion of the recovery received by the U.S. government.
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