DoJ intervenes in Florida Stark Law case

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The U.S. Department of Justice (DoJ) has partially intervened in a lawsuit under the False Claims Act filed by a whistleblower against Halifax Health Medical Center of Daytona Beach, Fla., and Halifax Staffing.

The suit was filed in the U.S. District Court for the Middle District of Florida and involves allegations that Halifax violated the Stark law, which prohibits a hospital from billing Medicare for services referred by physicians who have improper financial relationships with the hospital, according to a DoJ statement.

Halifax was alleged to have improper contracts with three neurosurgeons and six medical oncologists because the hospital either paid more than fair market value, were not commercially reasonable or took into consideration the volume or value of the physicians’ referrals.

“Improper financial arrangements between hospitals and physicians threaten patient safety because personal financial considerations, instead of what's best for the patient, can influence the type of healthcare that is provided,” Tony West, assistant attorney general for the Civil Division of the DoJ, said in the release. “The department is committed to preventing kickbacks that can corrupt the integrity of healthcare delivery.”

Elin Baklid-Kunz, Halifax Staffing’s director of physician services, initially filed the lawsuit in July 2009 under the whistleblower provisions of the False Claims Act. Under those provisions, private parties are able to sue on behalf of the U.S., while the U.S. is also authorized to intervene and take over the lawsuit. Baklid-Kunz will be entitled to receive a percentage of any recovery, which could be millions should the allegations be proven in court.

The DoJ has used the False Claims Act to recover more than $5.9 billion since January 2009 in cases involving fraud against federal healthcare programs, according to the release.