23-hospital system enters $14M settlement with feds over improper physician payments

Mercy Health, a 23-hospital system based in Cincinnati, agreed to pay the federal government $14.25 million to resolve allegations the system violated the False Claims Act, according to the Department of Justice.

The settlement resolves allegations Mercy Health provided compensation to six referring physicians — one oncologist and five internal medicine physicians — that exceeded fair market value of their services. The health system disclosed these issues to the DOJ.

"When physicians are rewarded financially for referring patients to hospitals or other healthcare providers, it can affect their medical judgment, resulting in overutilization of services and higher health care costs," said Acting Assistant Attorney Chad A. Readler, head of the DOJ's Civil Division. "In addition to yielding a recovery for taxpayers, this settlement should deter similar conduct in the future and help make health care more affordable."

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