After two neurologists accused the Christiana Care Health System (CCHS) in Newark, Del., of misusing federal and state healthcare funds, CCHS has agreed to settle the suit for $3.3 million with the U.S. government and the state of Delaware.
The False Claims suit, filed in 2005, alleged that CCHS had falsely submitted claims to Medicare and Medicaid that said that it was compliant with federal and state laws. However, according to the Department of Justice (DoJ), “CCHS knew that it had an impermissible financial relationship with a group of Wilmington, Del., neurologists who referred patients to CCHS in violation of federal and state law.”
Under the settlement, CCHS will be required to enter into a Corporate Integrity Agreement that will be overseen by the Office of Inspector General (OIG).
Additionally, the suit alleged CCHS of violating the Physicians Self-Referral Statute (Stark Statute) and the Delaware Anti-Kickback Statute. The suit said that the statutes, instated to ensure that medical judgements are not swayed by financial gain, were violated when CCHS paid the neurologists fees that were higher than Medicare and Medicaid reimbursement amounts.
According to the DoJ, the Stark Statute exists to prohibit hospitals from profiting from referrals from physicians when these groups have “impermissible financial relationships.”
“Ensuring that public healthcare dollars are spent in accordance with the law is of importance to all of us, particularly now as Congress debates healthcare reform,” said U.S. Attorney for Delaware David C. Weiss. “Physician referrals cannot be clouded by improper financial incentives.”
The False Claims Act was enacted to hamper Medicare and Medicaid fraud.