Indianapolis-based healthcare network, Community Health Network, has agreed to pay the United States $345 million in a settlement concerning allegations that the network violated the False Claims Act. The settlement aims to resolve claims that the network knowingly submitted claims to Medicare for services that were referred in violation of the Stark Law.

The allegations against Community Health Network were initially filed in July 2014 in the Indianapolis division of the United States District Court for the Southern District of Indiana. The lawsuit claimed that the network engaged in a scheme to pay improper compensation to physicians, incentivizing them to illegally refer patients to its hospitals and associated medical facilities for services paid for by government-funded healthcare programs.

Specifically, the network was accused of overcompensating its cardiologists, cardiothoracic surgeons, vascular surgeons, neurosurgeons, and breast surgeons well above fair market value. The complaint highlighted that physicians' salaries paid by the network were sometimes double what they were receiving through private practice. Additionally, the network allegedly awarded bonuses tied to the number of referrals made by physicians.

As a result, Community Health Network submitted claims to Medicare for services that were a result of the referrals, violating federal and Indiana False Claims Acts. The complaint also stated that the network had ignored warnings about potential legal action for overcompensating physicians.

To resolve the allegations, Community Health Network will pay $345 million to the United States. Additionally, the network will enter into a five-year Corporate Integrity Agreement with the Office of Inspector General for the Department of Health and Human Services. This agreement aims to ensure compliance with healthcare regulations and prevent similar violations in the future.

Principal Deputy Assistant Attorney General Brian M. Boynton emphasized that the Stark Law was enacted to protect the integrity of federal healthcare programs and to safeguard taxpayer dollars. He stated that the settlement demonstrates the Department of Justice's resolve to enforce the law and hold companies accountable for improper financial incentives that may corrupt physicians' clinical judgment.

Community Health Network released a statement stressing that the settlement is completely unrelated to the quality and appropriateness of the care provided to patients. They maintained that the network prioritizes the highest regulatory and ethical standards in all their business processes. The spokesperson for the network stated that the settlement resolved the claims with no finding of wrongdoing.

This settlement and the allegations against Community Health Network shed light on the importance of enforcing healthcare regulations to maintain patient trust and prevent unnecessary medical services that waste taxpayer dollars. It also raises discussions about potentially updating the Stark Law to base damages on patients receiving unnecessary care rather than imposing extraordinary settlements on hospitals.

The settlement serves as a significant step towards protecting the integrity of federal health care programs and holding accountable those who seek to profit off Medicare patients through deceptive compensation schemes.