Wheeling Hospital in West Virginia is facing a federal lawsuit over anti-kickback law violations involving obscene incentives paid to individual physicians, often surpassing $1 million a year.
It is illegal for hospitals to financially entice specialists to refer patients to their facilities. A common practice, nonetheless, this type of kickbacks can help hospitals secure millions of dollars in Medicare and Medicaid reimbursements. The potential earnings are so spectacular, that dishonest hospital administrators are often prepared to reward referrals very generously.
Before implementing an alleged kickback scheme, Wheeling Hospital was barely above water financially. According to prosecutors, Wheeling paid Adam Tune, an anesthesiologist and pain management specialist, $1.2 million annually and built him a clinic on its own campus. Tune’s salary is unusually high for someone in his field; roughly in the top 10 percent nationwide.
According to a whistleblower lawsuit filed by Louis Longo, a former executive VP at the hospital, Wheeling also paid a gynecologist $1.3 million a year, though her department was not profitable. A cardiothoracic surgeon received $770,000 a year and 12-week vacations though his team also incurred losses, the complaint says.
Referrals from these specialists earned Wheeling millions of dollars. The Stark Law “prohibits physicians from referring patients to receive ‘designated health services’ payable by Medicare or Medicaid from entities with which the physician or an immediate family member has a financial relationship,” according to the Office of the Inspector General.
Hospitals who pay kickbacks in exchange for referrals violate the Anti-Kickback Statute, defined by the OIG as “a criminal law that prohibits the knowing and willful payment of ‘remuneration’ to induce or reward patient referrals or the generation of business involving any item or service payable by the Federal healthcare programs.” ‘Remuneration’ in this case includes paying for trips, luxury gifts, endorsements, and speaking fees.
Wheeling has denied the allegations and filed a countersuit against the whistleblower, claiming the high salaries it paid were genuine payment for the services of reputable specialists.
The U.S. healthcare system is a fertile terrain for anti-kickback violations. A recent Merrit Hawkins survey revealed that specialists can generate 10 times their salary in revenue for hospitals. This makes kickbacks very profitable for both hospitals and physicians, and extremely damaging for taxpayers, as the bulk of that revenue usually comes from government programs.
Carnegie Mellon health policy professor Martin Gaynor agrees. “If you acquire some key physician practices, it really shifts their referrals to the mothership. Any firm—it doesn’t matter what the firm is — once they get dominant market power, they don’t want to give it up,” the scholar said in a statement.
Recent illegal kickback cases that made headlines include William Beaumont Hospital’s $85 million settlement over subsidized offices and assistant salaries and Kalispell Regional Healthcare’s $24 million settlement over inflated physician salaries.
If you know of a healthcare provider or company that is cheating its patients, call us. We can assist you in putting an end to the fraud and help you receive a large cash reward for your trouble. Connect with us 888.742.7248 or ONLINE.