Surgeon Settles Kickback Claims Tied to Naples Hospital Operator for $4.25M
Allegations were first brought in under the qui tam, or whistleblower, provisions of the False Claims Act.
October 03, 2019 at 05:28 PM
3 minute read
The original version of this story was published on The Legal Intelligencer
A surgeon agreed to pay $4.25 million to resolve whistleblower claims that he allegedly accepted an inflated salary and other payments as a kickback for referring clients to two hospitals, federal prosecutors said.
The settlement resolves the bulk of a yearslong litigation that resulted in a $262 million settlement with the Naples-based hospital chain Health Management Associates last year, according to whistleblower attorney Pietragallo Gordon Alfano Bosick & Raspanti attorney Marc Raspanti.
The settlement announced by the U.S. attorney of the Eastern District of Pennsylvania involved Dr. Glenn Kline and his medical practice, Community Surgical Associates. He worked as a general surgeon in Lancaster, Pennsylvania, from 2009 to 2012, and regularly referred clients to Lancaster Regional Medical Center and Heart of Lancaster Medical Center, both former HMA hospitals.
Prosecutors said Kline had "significant leverage" over HMA as it sought to compete in the Lancaster market since he was a major source of surgical business in the area. To secure Kline's referrals, HMA paid him $1.2 million annually, the whistleblowers alleged. Prosecutors said the salary was over 300% more than the national nonprofit Medical Group Management Association's median salary for comparable surgeons.
HMA also was accused of making payments to Community Surgical Associates.
"Our resolution of this matter and the significant recovery we have obtained from this physician show once again that no matter how complex the fraud scheme is, we will find it, stop it and punish it," First Assistant U.S. Attorney Jennifer Arbittier Williams said in announcing the settlement.
Allegations were first brought under the qui tam provisions of the False Claims Act by George Miller and Michael Metts, former HMA executives in Lancaster. Metts and Miller are set to recover about $1.05 million for their roles in the case.
Metts and Miller were represented by Raspanti and Pamela Coyle Brecht, who was lead in the Kline matter.
"We very much appreciate the confidence the government placed in our ability, their shared determination, and the true sense of teamwork that resulted from our participation in all aspects of the investigation and resolution of this claims," Brecht said in a statement.
Raspanti also said the settlement reflects the willingness of federal prosecutors to investigate novel fraud claims.
"Patients need to trust in the independent medical judgment of their physicians and cannot be at the unchecked mercy of providers motivated by financial gain," Raspanti said.
The Kline settlement is the last piece of a nationwide False Claims Act litigation stemming from an alleged scheme orchestrated by HMA to fraudulently boost profits.
That litigation was brought by eight whistleblowers from Florida, Georgia, Pennsylvania, Illinois, North Carolina and South Carolina. The hospital chain agreed to resolve the whistleblower lawsuits In September 2018.
The Pennsylvania end of the litigation included claims by Miller and Metts against HMA, which represented a $55 million piece of the $262 million settlement. The pair also brought claims against Physicians Alliance Ltd., which settled in December 2017 for $4 million.
"The Miller-Metts case was unusual in that it really laid out the underbelly of how joint-venture and hospital relationships with physicians can go off the rails," Rapsanti said.
The settlement was reached after mediation before U.S. Magistrate Judge David R. Strawbridge.
Kline's attorney, Michael Salmanson of Salmanson Goldshaw, did not return a call seeking comment by deadline.
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