MediSys Health Network to pay $4M to settle claims it made 'improper' payments to referring physicians

Gavel and flag in courtroom
MediSys Health Network will pay a $4 million settlement to the Department of Justice. (Getty/AlexStar)

Two federal disputes have ended with the health systems agreeing to settle the charges for a hefty price. 

The first one will require a New York City health system to pay $4 million to settle claims that it engaged in “improper financial relationships” with referring physicians.

MediSys Health Network operates the two Queens hospitals named in the suit, Jamaica Hospital Medical Center and Flushing Hospital and Medical Center, and a whistleblower suit alleged that the organization submitted false Medicare claims for patients who were referred by doctors that the system had financial dealings with, the Justice Department announced on Wednesday.

MediSys offered the physicians compensation and office lease arrangements that did not comply with the Stark Law, according to the announcement.

Hospitals and health systems that engage in these types of improper financial relationships with referring physicians “compromise the referral process and encourage over-utilization of services, to the potential detriment of both patients and taxpayers,” Acting U.S. Attorney Bridget M. Rohde, who covers New York’s eastern district, said.

“This recovery should help to deter other health care providers from entering into improper financial relationships with physicians that can taint the physician's’ medical judgment, to the detriment of patients and taxpayers,” Acting Assistant Attorney General Chad A. Readler, of the Justice Department’s Civil Division, also said in the announcement.

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Meanwhile, Henry Ford Health System also settled a federal dispute on Wednesday, the Department of Labor announced. The system has agreed to pay more than $90,000 in back wages owed to 22 employees in the cardiac sonography department at Detroit’s Henry Ford Hospital.

The department’s Wage and Hour Division found that cardiac sonographers would frequently begin working 45 minutes prior to the start of their shifts to prepare for patients to arrive, and would often work through meals and breaks to complete time-sensitive reports. The workers were not paid during lunch hours or for the work performed prior to their shifts. 

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Henry Ford has agreed to pay for those periods in the future, according to the announcement.

“As this matter underscores, employees must be paid for all work time,” Wage and Hour Division District Director Timolin Mitchell said. "If patient scheduling and other patient care duties cause employees to start work before their scheduled shift or to work through a scheduled lunch hour, the employees must be compensated.”