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Mercy Health to pay $14.25 million over improper doctor payments

Cincinnati-based Mercy Health, a nonprofit healthcare organization operating in Ohio and Kentucky has agreed to pay the United States $14,250,000 to settle False Claims Act allegations. According to the Justice Department, Mercy Health made improper payments to physicians.

Federal law limits the financial relationships that hospitals and certain healthcare organizations can have with physicians who refer patients to their facilities. Doctors are to be paid no more than the fair market rate for their services, and any incentives offered must be based solely on the patients' clinical interests. Additional payments or incentives may be construed as illegal kickbacks, which result in higher overall healthcare costs and, often enough, false claims against federal healthcare programs.

In this case, Mercy Health allegedly paid six physicians more than the fair market value of their services. Those doctors included an oncologist and five doctors of internal medicine. The company self-disclosed these improper payments to the government.

"When physicians are rewarded financially for referring patients to hospitals or other health care providers, it can affect their medical judgment, resulting in overutilization of services and higher health care costs," said the head of the Justice Department's Civil Division. "In addition to yielding a recovery for taxpayers, this settlement should deter similar conduct in the future and help make health care more affordable."

Mercy Health was not required to admit any wrongdoing as part of this settlement, and no determination of liability has been made.

When improper activity is discovered in healthcare companies or other organizations that do work for the government, it is often an internal whistleblower who finds and reports the activity. When there is evidence of fraud, waste or abuse in government programs, the whistleblower may have the right to file a False Claims Act lawsuit on behalf of the government. When successful, these lawsuits offer whistleblowers a reward in the form of a percentage of the total amount recovered for taxpayers.

If you are in the position to blow the whistle, however, you should work with an attorney who understands whistleblower law. This can help ensure you receive any applicable reward and limit your exposure to retaliation.

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