Hospitals have beds and staff, and if they don’t fill the beds they can’t pay their staff. Whether a hospital is a for-profit or a non-profit entity, it’s always looking for ways to encourage outside doctors to admit their patients to that hospital. It’s one of the driving forces for hospitals taking over private practices over the past decade. After all, if the doctor now becomes your employee the doctor obviously admits patients to his employer hospital and not to the hospital across town. So do hospitals pay doctors to admit patients?
Some doctors still maintain their own practices, and if there are several hospitals in the community the doctor can decide to which one he will admit his patients. A cardiologist in New Hampshire who had a stellar reputation and many patients faced that choice when his patients needed to be hospitalized. And since his choice of a hospital benefited that hospital, money began to speak loudly.
The cardiologist’s “hospital of choice” was sued by the federal government because of a scheme in which the hospital provided kickbacks and other financial benefits to the doctor when he sent patients its way. The suit was brought under the federal “False Claims Act” and the “Anti-Kickback” statute. The hospital ended up paying $3.8 million to resolve the claims.
The U.S. Attorney handling the case said: “When patients are referred for medical services, those referrals should be based solely on medical need and not affected by financial considerations.” The basis for the U.S.’s claim was the impact of the medical charges that were paid by Medicare, Medicaid, and other federal healthcare programs.
The Office of Inspector General of the U.S. Department of Health and Human Services, the Office of Inspector General of the Department of Defense, and the FBI all worked on the case.
The hospital, of course, did not admit fault or liability for its alleged actions. Interestingly, the whistleblower who alerted the federal authorities to the scheme, who was a former hospital employed doctor, will receive a portion of the final settlement amount under a federal whistleblower law.
