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US Joins False Claims Act Lawsuit Alleging Illegal Physician Compensation by IMC-Diagnostic a Mobile, Ala., Health Firm

by | Jul 10, 2013 | Firm News

The government has intervened in a False Claims Act lawsuit against Infirmary Health System Inc. and its related entities: IMC-Diagnostic and Medical Clinic P.C., Diagnostic Physicians Group P.C. and Infirmary Medical Clinics P.C., the Department of Justice announced today. The lawsuit alleges that IMC-Diagnostic and Medical Clinic, in Mobile, Ala., billed Medicare for services referred by Diagnostic Physicians Group physicians, in violation of the Stark Law and Anti-Kickback Statute. IMC-Diagnostic and Medical Clinic is owned by Infirmary Medical Clinics, a subsidiary of Infirmary Health System, also based in Mobile.

“Financial arrangements that compensate physicians for referrals encourage physicians to make decisions based on financial gain rather than patient needs,” said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division. “The Department of Justice is committed to preventing illegal financial relationships that corrupt the integrity of our public health programs.”

 Enforcement of the Stark Law and the Anti-Kickback Statute is intended to ensure that physicians’ medical judgment is not compromised by improper financial incentives. The Stark Law forbids a clinic or hospital from billing Medicare for certain services referred by physicians who have a financial relationship with the entity. The Anti-Kickback Statute prohibits offering, paying, soliciting or receiving remuneration to induce referrals of services or items covered by federal health care programs, including Medicare. The lawsuit alleges that the IMC-Diagnostic and Medical Clinic improperly paid Diagnostic Physicians Group physicians compensation that included a percentage of the money collected from Medicare for tests and procedures the doctors referred to the clinic. These improper payments, and resulting submission of false claims to the Medicare program, violated the Stark Law and Anti-Kickback Statute.

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