Whistleblower Bruce Moilan, a former employee of Universal Health Services, alleged that his employer paid doctors for referals in direct violation of the federal Antikickback Statute and Stark law. According to a friday DoJ press release, the company settled those claims by paying $27.5 million and agreeing to be closely monitored through a corporate integrity agreement. The lawsuit alleged that illegal kickbacks were disguised “through a series of sham contracts, including medical directorships and lease agreements.” Barring statutory exceptions, it is against federal law for Medicare providers to bill Medicare for referrals from doctors with whom the providers have a financial relationship, no matter what you call the payment.

“Payment by hospitals to doctors for patient referrals violates federal law and carries the inherent risk that the independent judgment of doctors regarding the best facility for the treatment and care for a particular patient may be adversely influenced; the patient and his medical needs should always be foremost.” — Tim Johnson, U.S. Attorney for the Southern District of Texas.

Moilan will recieve $5.5 million for bringing the allegations to light and for his assistance with the case against Universal Health Services and subsidiary McAllen Hospitals, L.P. d/b/a South Texas Health System.

To report Antikickback or Stark violations, contact Frohsin & Barger.