South Carolina system pays $36.5M to settle whistleblower's kickback allegations

Columbia, S.C.-based Bon Secours St. Francis Health System, St. Francis Hospital and St. Francis Physician Services have agreed to pay $36.5 million to resolve allegations that it made illegal kickback payments to surgeons tied to the volume or value of referrals. 

St. Francis allegedly caused false claims submissions to Medicare and Tricare because of an unlawful payment structure between the health system and Greenville, S.C.-based Piedmont Orthopedic Associates, according to the Justice Department. Prosecutors alleged that St. Francis' bonus payments to the orthopedic group's physicians violated both the Stark Law and Anti-Kickback Statute. 

The whistleblower, Daniel Lee, MD, who filed the case under provisions of the False Claims Act will receive about $10.2 million of the settlement. The settlement resolves allegations made in the lawsuit and is not an admission of any wrongdoing by St. Francis.

While St. Francis disputes the claims made in the lawsuit, the health system told Becker's that the settlement allows it to "place our focus where it belongs — continuing to compassionately serve patients and communities by providing the high-quality, mission-centric care that our community has come to expect without the disruption this kind of litigation can pose."

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