Sanford Health will pay $20M to settle false claims lawsuit

Sioux Falls, S.D.-based Sanford Health has agreed to pay $20.25 million to settle False Claims Act allegations originally brought in a whistleblower lawsuit filed in 2016, according to the Department of Justice.

The settlement resolves allegations that Sanford officials knew one of the health system's neurosurgeons, Wilson Asfora, MD, was receiving kickbacks from using devices distributed by a company he owned. The alleged scheme created an incentive for Dr. Asfora to perform unnecessary surgeries.

Prosecutors alleged that despite repeated warnings from Dr. Asfora's colleagues and others, Sanford continued to employ him, continued to allow him to profit from the devices he used in surgeries performed at Sanford, and continued to submit claims to government payers for these surgeries, some of which were medically unnecessary.

Two physicians originally filed the complaint under the qui tam, or whistleblower, provisions of the False Claims Act. After the complaint was unsealed this summer, Sanford cut ties with Dr. Asfora.

"As you know, Sanford took these allegations seriously, including suspending the use and purchase of Dr. Asfora's devices," Sanford COO Matt Hocks wrote in an email to colleagues Oct. 28, according to the Argus Leader. "We then severed our relationship with him, based solely on his business practices — not his medical care. We are confident that Sanford acted appropriately and in good faith in the conduct of this matter, and we believe collaborating with the federal government on this settlement was in the best interest of our patients."

Regarding the settlement, Dr. Asfora released the following statement to the Argus Leader:

"I want to make my position clear. I did not perform any unnecessary surgeries and I did not do any surgeries for the purpose of profiting from using medical devices I invented. I stand by my work as a physician and made every single medical decision based solely on my judgment as to what was the best for my patient, not myself. I am disappointed that after originally accurately identifying the relators' and the government's accusations as 'bogus,' Sanford made business decisions that led it to fire me and pay my accusers over $20 million, but, sadly, for some, business is just business."  

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