Feds’ settlement with Sutter over kickback, billing allegations now totals $46 million
One day after officials announced a $30.5 million settlement with Sutter Health over kickback allegations, prosecutors in Sacramento revealed the health care giant had agreed to pay an additional $15 million over claims submitted to the federal Medicare program.
U.S. Attorney McGregor Scott announced Friday in Sacramento that Sutter had agreed to pay $15,117,516 “to resolve conduct concerning violations of the Physician Self-Referral Law, commonly known as the Stark Law, as well as double-billing for certain services.”
“The Stark Law prohibits a hospital from billing Medicare for certain services referred by physicians with whom the hospital has a financial relationship, unless that relationship satisfies one of the law’s statutory or regulatory exceptions,” Scott’s office said, adding that the “conduct at issue was self-disclosed by Sutter to the United States.”
“The law is intended to ensure that medical decision-making is not influenced by improper financial incentives and is instead based on the best interests of the patient,” Scott’s office said.
The settlement, which does not include admissions of liability against Sutter, comes one day after a judge unsealed a lawsuit filed in secret in 2014 against Sutter by the federal government and a former compliance officer for the Sacramento-based health giant.
That lawsuit, spurred by allegations of kickbacks by whistleblower Laurie Hanvey, led to Sutter’s agreement to pay $30.5 million to settle that matter. A surgical group that allegedly was reimbursed to refer patients to Sutter, Sacramento Cardiovascular Surgeons Medical Group, agreed to pay the government $506,000 to settle that case, also without an admission of wrongdoing.
Hanvey and her attorneys are to receive $5.795 million from the lawsuit settlement of $30.5 million from Sutter and $96,140 from Sacramento Cardiovascular.
“Sutter reached a resolution of the matter raised by Ms. Hanvey by agreeing to make a repayment to the federal government,” Sutter said in a statement Friday. “This settlement was not based upon any alleged payment for referrals and there was no finding that Sutter violated the anti-kickback laws.
“Any assertion that the settlement was based upon a finding of payments for referrals is completely inaccurate and Sutter denies any such conduct. Sutter has in place a strong compliance program which had identified the issues raised by Ms. Hanvey.
“Indeed, Ms. Hanvey was working with the hospital on the process of remediating these issues when Ms. Hanvey elected to file her lawsuit under seal.
“This settlement involves various matters, including a self-disclosure dating back to 2010, and two additional self-disclosures. Self-disclosures are done when providers like Sutter self-identify a potential non-compliant arrangement and voluntarily disclose those arrangements to the government. Sutter’s compliance program discovered the issues, just as it was designed to do, and Sutter brought these matters forward on our own initiative.”
This story was originally published November 15, 2019 at 1:57 PM with the headline "Feds’ settlement with Sutter over kickback, billing allegations now totals $46 million."
