Whistleblower suit filed against Iasis

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Healthcare services provider Iasis Healthcare of Franklin, Tenn., is facing a qui tam (whistleblower) lawsuit that alleges it illegally compensated doctors to refer patients to Iasis hospitals and performed unnecessary medical services, including interventional cardiology procedures, to boost its profits.

The suit, which was brought under the False Claims Act, has been under seal in federal district court in Phoenix for more than two years, according to Iasis. Jerre Frazier, a former vice president for ethics and compliance for Iasis Healthcare, filed the qui tam lawsuit on behalf of the U.S. government. Frazier also served as Iasis chief compliance officer and as chairman of its corporate compliance committee.

A federal judge unsealed the lawsuit against Iasis Healthcare after the government filed a notice that it was unable to meet a court-imposed deadline for a decision on whether it would intervene in the case. The government said it is investigating the allegations and would decide whether to intervene once its investigation was completed.

In addition to making allegations about improper financial relationships with physicians, the complaint also alleges that many medically unnecessary procedures, including interventional cardiology, radiology, and other procedures, have been performed at Mesa General Hospital at Mesa, Ariz.; St. Luke's Hospital in Phoenix; Park Place Hospital in Port Arthur, Texas; Odessa Regional Hospital in Odessa, Texas; and Memorial Hospital in Tampa, Fla.; and other Iasis Healthcare hospitals.

Iasis Healthcare, a privately held company, owns or leases 16 acute-care hospitals and one behavioral health hospital in six states and has total annual net revenue of about $1.8 billion.

Iasis said it intends to vigorously defend itself against its former employee’s allegations.