Siouxland Surgery Center, doing business as Dunes Surgical Hospital, United Surgical Partners International (USPI) and USP Siouxland Inc. have agreed to pay about $12.76 million to resolve alleged False Claims Act violations.
The allegations are related to improper financial relationships between Dunes and two physician groups, according to a Sept. 16 U.S. Department of Justice (DOJ) announcement.
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.
According to the DOJ’s announcement, Dunes made “significant” financial contributions to a nonprofit affiliate of a physician group whose physicians referred patients to Dunes. That alleged activity took place from at least 2014 through 2019.
DOJ claimed that the payments funded the salaries of athletic trainers who generated referrals to both the physician group and to Dunes.
“Illegal kickbacks and self-referrals make health care more expensive and create the potential for medical decisions that are not based on what is best for patients,” U.S. Attorney Timothy T. Duax for the Northern District of Iowa said in the announcement.
Additionally, the settlement 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.
DOJ 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,” DOJ explained in its announcement. “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.”
Physician referral rules and regulations have gotten increasingly complex as health care has become more integrated.
“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,” Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division, said in the announcement.
Settlements such as this one remain common across the health care landscape, and the DOJ in its announcement went out of its way to note that a settlement does not inherently mean there’s an admission of guilt or liability.
What’s more, the DOJ credited Dunes and USPI for their cooperating and willingness to take immediate action.
“Following an internal compliance review and independent investigation, Dunes and USPI promptly took remedial actions and disclosed the relevant arrangements to the government,” the announcement continued. “Dunes and USPI also provided the government with a detailed and thorough written disclosure and cooperated with the government throughout its investigation.”
