Massachusetts Attorney General Martha Coakley reached a $1.77 million settlement with the South Shore Physician Hospital Organization on Tuesday over allegations that it paid kickbacks to physicians in exchange for patient referrals.
As part of the settlement, the commonwealth's government will receive $620,000 from South Shore Physician Hospital Organization, Inc. and its affiliated companies, Physicians Organization of the South Shore, Inc. and South Shore Hospital, Inc.
From 2001 to 2010, the hospital allegedly paid cash kickbacks through its grant program. As part of the grants, the hospital required physician groups to send patients to specific health care providers who were included under the South Shore umbrella. The hospital allegedly gave cash kickbacks to 33 physician groups as part of the awarding of 103 grants.
MassHealth will receive $310,625 from the settlement with the remainder going to the federal government to cover Medicare and Medicaid payments that were submitted by the participating providers who received referrals from the grant recipients.
“Instead of giving patients lower cost options and flexibility in health care services, we allege these defendants looked to increase their referrals through an unlawful kickback operation,” Coakley said. “We are pleased to have worked with our partners in federal law enforcement to ensure that improper incentives do not undermine the integrity of our health care system.”