Siouxland Surgery Center LLP, doing business as Dunes Surgical Hospital (Dunes), United Surgical Partners International Inc. (USPI), and USP Siouxland Inc. have agreed to pay approximately $12.76 million to resolve alleged False Claims Act violations relating to improper financial relationships between Dunes and two physician groups. Dunes is a surgical hospital located in Dakota Dunes, South Dakota. Since July 1, 2014, USPI has maintained partial ownership of Dunes through USP Siouxland, a wholly owned subsidiary of USPI. Dunes and USPI disclosed the arrangements at issue to the government following an internal compliance review and independent investigation.
The settlement resolves allegations that, from at least 2014 through 2019, Dunes made significant financial contributions to a non-profit affiliate of a physician group whose physicians referred patients to Dunes. Those payments allegedly funded the salaries of athletic trainers who generated referrals to both the physician group and to Dunes. The settlement also resolves allegations that during the same time period, Dunes provided another physician group with free or below-fair-market-value clinic space, staff, and supplies. The United States alleged that these arrangements violated both the Anti-Kickback Statute (AKS) and the Physician Self-Referral Law, commonly known as the Stark Law. The AKS prohibits the provision of remuneration to induce the referral of services or items that are paid for by a federal health care program. The Stark Law prohibits hospitals from billing for certain services referred by physicians with whom the hospital has a financial relationship unless that relationship satisfies one of the law’s statutory or regulatory exceptions. A claim submitted in violation of the AKS or the Stark Law can also violate the False Claims Act.
“The AKS and Stark Law are designed to ensure that decisions about patient care are based on physicians’ independent medical judgment and not their personal financial interest,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “As this settlement reflects, we will hold accountable those who violate these important safeguards, but we will also give credit to those who disclose their wrongdoing, take appropriate remedial actions and meaningfully cooperate with the government’s investigation.”
In connection with the settlement, the United States acknowledged that Dunes and USPI took several significant steps entitling them to credit for cooperating with the government. Following an internal compliance review and independent investigation, Dunes and USPI promptly took remedial actions and disclosed the relevant arrangements to the government. Dunes and USPI also provided the government with a detailed written disclosure and cooperated throughout its investigation.
“Illegal kickbacks and self-referrals make healthcare more expensive and create potential for medical decisions that are not based on what is best for patients,” said U.S. Attorney Timothy T. Duax for the Northern District of Iowa. “Our office welcomes cooperation from those who self-disclose and will continue working with our law enforcement partners to ensure taxpayers do not bear costs of illegal practices.”
“The U.S. Attorney’s Office is dedicated to fostering a healthcare environment prioritizing patient well-being above all,” said U.S. Attorney Alison Ramsdell for South Dakota's District. “We stand firmly against any actions undermining trust in patient care.”
“Individuals participating in federal health care must obey laws preserving program funds' integrity,” said Special Agent in Charge Linda T. Hanley of HHS-OIG.
The settlement resolves allegations of false billings to Medicare, TRICARE, and Medicaid programs jointly funded by federal/state governments.
In addition to approximately $12.76 million paid to federal authorities for alleged False Claims Act violations, South Dakota, Iowa, Nebraska will collectively receive around $1.37 million for their share of Medicaid's portion.
This resolution resulted from coordinated efforts between various governmental bodies including Civil Division’s Commercial Litigation Branch Fraud Section; U.S Attorneys’ Offices; HHS-OIG.
Trial Attorney Nathan Green alongside Assistant U.S Attorneys Brandon Gray (Northern District Iowa) & Alexis Warner (South Dakota) handled this matter.
The claims resolved by this settlement remain allegations only without determination liability.
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