Phoenix-based Southwest Orthopedic and Spine Hospital — doing business as Oasis Hospital — has agreed to pay $5.6 million to resolve allegations that it violated the False Claims Act by maintaining improper financial relationships with a referring physician group.
The settlement also involves United Surgical Partners International — a subsidiary of Dallas-based Tenet Healthcare — and Dignity/USP Phoenix Surgery Centers.
Four things to know:
1. From 2011 through 2018, the Justice Department alleged Oasis made improper financial contributions to the Southwest Physicians, a group that referred patients to the hospital. The financial contributions allegedly included interest payments on convertible bonds issued to the physician group.
2. Investigators alleged the arrangements violated the Anti-Kickback Statute — and Stark law, which prohibits certain physician self-referrals. The Anti-Kickback Statute bars offering or paying money to induce referrals for services covered by federal healthcare programs. The Stark law bans hospitals from billing for certain services referred by physicians with whom the hospital has a financial relationship, unless the relationship meets specific exceptions. Claims submitted in violation of either law can also violate the False Claims Act.
3. According to the Justice Department, USPI disclosed the arrangements to the government following a 2019 internal compliance review and independent investigation. Oasis and USPI also took remedial actions and provided a detailed written disclosure while cooperating with the government’s investigation.
4. The settlement resolves allegations only, and there has been no determination of liability.
“The AKS and Stark Law are designed to ensure that decisions about patient care are not influenced by physicians’ personal financial interest,” Assistant Attorney General Brett Shumate of the Justice Department’s Civil Division said in a Feb. 24 news release. “As this settlement reflects, we will hold accountable those who violate these important safeguards, but we will also give credit when resolving such misconduct to those who fully disclose their mistakes, take appropriate remedial actions, and meaningfully cooperate with the government’s investigation.”
Becker’s has reached out to Oasis, USPI and Dignity Health for comment and will update this story as more information becomes available.
