Joplin, Mo.-based Freeman Health System has agreed to a $9.3 settlement to resolve allegations that it knowingly compensated physicians in a manner that violated the Stark Law and False Claims Act.
The three-hospital system disclosed to the U.S. Attorney for the Western District of Missouri that a number of its physicians were eligible for incentive compensation that may have factored the value and volume of their referrals.
Following an investigation of Freeman's disclosures, the government claimed the system knowingly compensated some physicians in violation of the Stark Law. Freeman allegedly provided incentives to 70 of its physicians based on the revenue generated by their referrals for certain diagnostic testing and other services, and this pay model allegedly created an incentive for physicians to refer patients for those specific procedures.
The Stark Law prohibits hospitals from billing Medicare for services referred by physicians that have a financial relationship with the hospital. A prohibited financial relationship includes an agreement between a hospital and a physician to compensate a physician based on the volume of the physician's referrals or the revenue realized through those referrals.
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The three-hospital system disclosed to the U.S. Attorney for the Western District of Missouri that a number of its physicians were eligible for incentive compensation that may have factored the value and volume of their referrals.
Following an investigation of Freeman's disclosures, the government claimed the system knowingly compensated some physicians in violation of the Stark Law. Freeman allegedly provided incentives to 70 of its physicians based on the revenue generated by their referrals for certain diagnostic testing and other services, and this pay model allegedly created an incentive for physicians to refer patients for those specific procedures.
The Stark Law prohibits hospitals from billing Medicare for services referred by physicians that have a financial relationship with the hospital. A prohibited financial relationship includes an agreement between a hospital and a physician to compensate a physician based on the volume of the physician's referrals or the revenue realized through those referrals.
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