Steward faces false claims suit

The U.S. Attorney's Office has filed a complaint under the False Claims Act against Steward Health Care System and its subsidiaries, alleging violations of the physician self-referral law and submission of false claims to Medicare. 

The government announced the filing of its complaint against the Dallas-based Steward system, Steward Medical Group and Steward St. Elizabeth's Medical Center in Boston Dec. 18. 

The complaint claims that between January 2013 and March 2022, Steward Medical Group overpaid Arvind Agnihotri, MD, chief of cardiac surgery at Steward St. Elizabeth's, in relation to fair market value and linked the compensation to the volume or value of his referrals to the hospital. 

The government alleges that the medical group paid Dr. Agnihotri nearly $5 million in incentive pay tied to the number of cases Dr. Agnihotri referred to the 308-bed hospital, Dr. Agnihotri made referrals to the hospital in violation of the Stark Law, and the hospital then submitted over 1,000 claims to Medicare, which mistakenly paid tens of millions of dollars for the false claims. 

Becker's has reached out to representatives with Steward Health Care and will update this article if more information is made available from the defendants. 

The physician self-referral law, also known as Stark law, prohibits a hospital from billing Medicare for services referred by a physician with whom the hospital has an improper compensation relationship. Allegations brought in a lawsuit filed by a whistleblower prompted the investigation by several federal agencies, including the Defense Department and FBI.

Steward Health Care includes 33 hospitals and its medical group employs more than 1,700 providers across 11 states. In 2023, the health system agreed to pay $4.7 million to resolve allegations that its relationships with several physicians and physician practice groups violated federal law, including the False Claims Act.

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