St. John Health System to pay over $13M for settling False Claims Act allegations

St. John Health System, headquartered in Tulsa, Okla., has agreed to pay the United States $13,229,348.88 to settle allegations that it violated the False Claims Act, the Justice Department announced today.

The United States alleges that St. John submitted claims to Medicare and Medicaid that were tainted by the hospital's financial relationships with referring physicians. Specifically, the United States determined that St. John made payments to 23 individual physicians or physician groups to induce referrals for medical services.

Federal law prohibits healthcare providers like St. John from billing a federal health care program for referrals from doctors with whom the providers have a financial relationship, unless that relationship falls within certain exceptions. Additionally, the Anti-Kickback Statute prohibits the payment of kickbacks for the referral of services that are paid for under a federal health care program.

In April 2008, St. John submitted a self-disclosure report to the Department of Health and Human Service's Office of Inspector General that acknowledged that the physician agreements may have run afoul of federal law. The settlement announced today resulted from the company's disclosure.

"The resolution of this matter yielded a substantial recovery for taxpayers, and it underscores our commitment to ensure that services reimbursable by federal health care programs are based on the best interests of patients rather than the personal financial interests of referring physicians," said Tony West, Assistant Attorney General for the Department's Civil Division.

"This case reflects how we work with providers who self-disclose serious misconduct to efficiently and fairly reach a resolution that protects Federal health care programs and their beneficiaries," said Daniel R. Levinson, Inspector General for the Department of Health and Human Services.

The case was handled by the Department of Justice's Civil Division and the Office of Inspector General of the Department of Health and Human Services.