Memorial Health pays $9.8 million in record False Claims Act lawsuit

Memorial Health, Inc. will pay $9.8 million to settle False Claims Act allegations in the largest civil healthcare fraud recovery ever recorded by the U.S. Attorney's Office for the Southern District of Georgia.

Memorial Health and three entities operating within the system agreed to settle claims that the company recruited a physician group by paying them salaries above market value in an effort to improve patient referrals, according to the Savannah Morning News. The lawsuit was originally brought by former CEO Phillip Schaengold, who was fired by Memorial Health's board in 2011.

Memorial Health denied the allegations, but agreed to a five-year corporate integrity agreement with the Office of Inspector General (OIG).

Physician compensation agreements have been targeted by the OIG following a fraud alert released in June highlighting the agency's renewed interest in physician compensation agreements. Since then, health systems like Adventist Health System agreed to pay $118.7 million to settle claims that it provided excessive payments to physician in exchange for referrals. Broward Health also agreed to pay $69.5 million to settle claims that it provided exceedingly high compensation to nine physicians.

For more:
- read the U.S. Attorney's release
- here's the Savannah Morning News article