Community Health System and its affiliate Physician Network Advantage Inc. have agreed to pay $31.5 million to settle allegations of violating the False Claims Act through kickback schemes. The U.S. Attorney’s Office for the Eastern District of California said the companies gave Fresno-area physicians expensive wine, meals, and financial support in exchange for patient referrals. Acting U.S. Attorney Michele Beckwith said, "We cannot allow medical decisions to be distorted by kickback schemes or efforts to buy physicians’ loyalty with lucrative side perks." The settlement resolves the claims without an admission of wrongdoing.
Allegations against Community and Physician Network Advantage Inc. involved financial incentives labeled as bonuses for clinical integration activities, which were actually payments for physician referrals. As part of the settlement, Community Health System will sign a five-year Corporate Integrity Agreement with the Health and Human Services Office of Inspector General, requiring an internal review process to monitor compliance risks. Robb R. Breeden, Acting Special Agent in Charge of ealth and Human Services Office of Inspector General, stated, "Kickback arrangements aimed at improperly influencing medical decisions will remain a top investigative priority for our agency." The agreement aims to stop unlawful financial relationships that affect medical decisions and involve Medicare patients, as reported by the U.S. Attorney’s Office.
The case began with a whistleblower lawsuit filed by Michael Terpening under the False Claims Act’s qui tam provisions, which allow individuals to sue on behalf of the U.S. government and receive a portion of any settlement. Terpening is expected to receive about $5 million from the settlement. The lawsuit, United States ex rel. Terpening v. Fresno Community Hospital and Medical Center, involves serious allegations. Community Health System settled the case without admitting any wrongdoing, and no formal finding of liability was made. The settlement negotiations were led by Assistant U.S. Attorney David Thiess, with involvement from the Federal Bureau of Investigation and the U.S. Postal Service Office of Inspector General, as stated by the U.S. Attorney’s Office.
