FL pediatric facility pays $7M to settle whistleblower suit

All Children's Hospital in St. Petersburg, Fla., has agreed to settle a lawsuit accusing it of paying kickbacks to physicians to bring in more patients, the Tampa Bay Times reported.

The hospital will pay $7 million to settle the suit, which was brought by Barbara Schubert, its affiliated medical group's former director of operations.

Schubert claimed the hospital overpaid physicians in 2010 by at least $5 million in order to encourage them to bring more patients into the hospital. In one instance, a pediatric surgeon was hired at a $600,000 salary when the fair market value was closer to $350,000, the lawsuit alleged, according to the Times.

The hospital not only overpaid doctors, but had gone on a "hiring spree" in order to ensure it would receive more patients, with many of the physicians guaranteed bonuses if they brought in a certain number, according to Schubert's suit. The increase in patient flow doubled the pay of the hospital's chief executive officer and head of business development, the Times reported.

The suit echoes similar allegations about hiring and payment practices for specialty physicians at some of New York City's most prestigious hospitals. There, some specialists are allegedly paid millions of dollars a year, possibly to help encourage them to bring more patients through the doors of the hospitals, FierceHealthFinance previously reported. Several such doctors make more than $5 million a year.

However, demands for higher salaries and signing bonuses have increased among physician recruits in recent years.

Much of All Children's alleged actions were in response to cuts in the Medicaid program, which provides about 70 percent of the hospital's revenue, according to the lawsuit.

All Children's, which did not admit any wrongdoing, will pay the federal government $4 million and the state of Florida $3 million. Schubert will receive $1.9 million for her role in exposing the alleged kickbacks.

To learn more:
- read the Tampa Bay Times article