Healthcare Company to Pay $36.5 Million to Settle False Claims Act Allegations

St. Francis, owner and operator of the St. Francis healthcare system, a charitable organization in South Carolina, has agreed to pay $36.5 million to resolve allegations that it violated the False Claims Act, the Stark Law, and the Anti-Kickback Statute (“AKS”) by allegedly making payments to orthopedic surgeons that corresponded on the volume or value of referrals.

According to the allegations, St. Francis submitted false claims to Medicare and Tricare structured through an illegal contractual payment structure between St. Francis and Piedmont Orthopedic Associates (“POA”). POA’s compensation was determined by the volume or value of their referrals to St. Francis. These bonus payments to POA physicians were direct violations of both the Stark Law and the AKS.

The case was initially brough forth by a South Carolina orthopedic surgeon under the False Claims Act. After the U.S. Department of Justice declined to intervene, the whistleblower, also known as a relator, along with his counsel prosecuted the case. The relator is set to receive approximately $10.2 million as a whistleblower award from the qui tam settlement.