LA hospital operator to pay $42M to settle physician kickback case

The joint owners and operators of Los Angeles-based Pacific Alliance Medical Center agreed to pay $42 million to resolve allegations they violated the False Claims Act, according to the Department of Justice.

The allegations against Los Angeles-based PAMC Ltd. and Pacific Alliance Medical Center were originally brought in under the qui tam, or whistle-blower, provisions of the False Claims Act. The companies are accused of having improper financial relationships with certain physicians and billing Medicare and California's Medicaid program for services provided to patients referred to Pacific Alliance Hospital by those physicians.

The lawsuit alleged the companies' financial relationships with referring physicians violated the Anti-Kickback Statute and Stark Law, according to the DOJ.

Of the total settlement, $31.9 million will be paid to the federal government and the other $10 million will be paid to the state of California.

Pacific Alliance Medical Center shared the following statement with Becker's via email:

“The physicians, nurses and staff at Pacific Alliance Medical Center take pride in the award-winning care we have provided residents of downtown Los Angeles for nearly 150 years. It was important for us to put this matter behind us, without any admission of liability, so we can continue to focus instead on the essential, life-saving work we do in our community every day. We are confident that we have already put in place safeguards to ensure that our marketing policies and practices comply with the law. We want to reaffirm our unwavering commitment to ethical business practices. Now that this matter is behind us, we look forward to continuing to provide quality, compassionate care to our highly diverse patient population, 95 percent of whom are enrolled in the Medicare and Medi-Cal programs.”

Editor's note: This article was updated on June 30 to include a statement from Pacific Alliance Medical Center.

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