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Rialto Capital Management to pay $3.6 million to resolve kickback allegations


By Carrie Bradon | Jul 16, 2019

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WASHINGTON (Legal Newsline) – Rialto Capital Management LLC and its former affiliate have agreed to pay $3.6 million to resolve claims that Rialto and Kentuckiana Medical Center (KMC) violated the Anti-Kickback Statute, the Stark Law and the False Claims Act.

The U.S. Department of Justice announced the settlement June 3. The department alleged that Rialto and former affiliate RL BB-IN KRE LLC, which formerly owned the medical center, engaged in an illegal financial arrangement with two physicians who referred patients to the medical center.

"When doctors refer patients for tests and medical procedures, they must do so based on their own professional judgment and the medical needs of their patients, not personal financial benefits,” said Assistant Attorney General Jody Hunt for the Department of Justice’s Civil Division in a press release. “Illegal financial arrangements between health care providers undermine the integrity of our health care system, and we will continue to pursue those who engage in such conduct.”

According to allegations, KMC, under direction of Rialto, gave personal loans to two referring doctors and told them that they did not have to repay the loans, which constitutes provision of renumeration, which is prohibited by law.

The investigation was managed by the Civil Division's Commercial Litigation Branch and the U.S. Attorneys' Office for the Southern District of Indiana and the U.S. Department of Health and Human Services Office of Inspector General.

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