Pamela Coyle Brecht (left) and Marc Stephen Raspanti (right) of Pietragallo Gordon Alfano Bosick and Raspanti.

A Pennsylvania surgeon has agreed to pay $4.25 million to resolve claims that he allegedly accepted a highly inflated salary and other payments as a kickback for referring clients to two hospitals in Lancaster.

According to Pietragallo Gordon Alfano Bosick & Raspanti attorney Marc Raspanti, who represented the whistleblower in the qui tam action, the settlement resolves the bulk of a years-long litigation that last year resulted in a more than $260 million settlement with the Naples, Florida-based hospital chain Health Management Associates.

The settlement announced Thursday by the U.S. attorney of the Eastern District of Pennsylvania involved defendant Dr. Glenn Kline and his medical practice, Community Surgical Associates. As alleged in the lawsuit, Kline worked as a general surgeon in Lancaster between 2009 and 2012, and regularly referred clients to Lancaster Regional Medical Center and Heart of Lancaster Medical Center—both former HMA hospitals.

In announcing the settlement, federal 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 a salary of $1.2 million annually, the whistleblowers alleged. In their announcement, the feds said the salary was over 300% more than the Medical Group Management Association's median salary for comparable surgeons.

According to the allegations, HMA also made 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 in under the qui tam, or whistleblower, 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 role 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 from the firm.

Raspanti also said the settlement reflects a willingness of the Eastern District 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 had been brought by eight whistleblowers, from Florida, Georgia, Pennsylvania, Illinois, North Carolina and South Carolina. The hospital chain agreed to pay $262 million to resolve the False Claims Act whistleblower lawsuits In September 2018.

The Pennsylvania wing of that litigation included claims by Miller and Metts against HMA brought, which resulted in a $55 million piece of the $262 million settlement. The pair also brought claims against Physicians Alliance Limited, 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.