WASHINGTON — UPMC Hamot and Medicor Associates Inc. have agreed to pay the government $20.75 million to settle a False Claims Lawsuit.
The suit alleged they knowingly submitted claims to the Medicare and Medicaid programs that violated the Anti‑Kickback Statute and the Physician Self‑Referral Law, the Justice Department announced Wednesday.
Hamot became affiliated with UPMC after the conduct resolved by the settlement occurred.
The settlement resolves allegations brought in a whistleblower action filed under the False Claims Act alleging that, from 1999 to 2010, Hamot paid Medicor up to $2 million per year under 12 physician and administrative services arrangements which were created to secure Medicor patient referrals. Hamot allegedly had no legitimate need for the services contracted for, and in some instances the services either were duplicative or were not performed.
“Financial arrangements that improperly compensate physicians for referrals encourage physicians to make decisions based on financial gain rather than patient needs,” said Acting Assistant Attorney General Chad A. Readler, head of the Justice Department’s Civil Division. “The Department of Justice is committed to preventing illegal financial relationships that undermine the integrity of our public health programs.”
The lawsuit was filed by Dr. Tullio Emanuele, who worked for Medicor from 2001 to 2005, under the qui tam, or whistleblower, provisions of the False Claims Act.
In a March 15, 2017 ruling, the U.S. District Court for the Western District of Pennsylvania held that two of Hamot’s arrangements with Medicor violated the Stark Law. The case was set for trial when the United States helped to facilitate the settlement. Emanuele will receive $6,017,500.
“Federal law prohibits physicians from entering into financial relationships that may affect their medical judgment and drive up health care costs,” said U.S. Attorney Scott W. Brady. “Today’s settlement demonstrates our commitment to ensuring that health care decisions are made based exclusively on the needs of the patient, rather than the financial interests of health care providers.”
This matter was handled on behalf of the government by the U.S. Attorney’s Office for the Western District of Pennsylvania, the Justice Department’s Civil Division, and the Department of Health and Human Services Office of the Inspector General.
The False Claims Act claims resolved by this settlement are allegations only and there has been no determination of liability.
