Are kickbacks inherent to doc hospital employment?

Adding to a growing chorus of concerns about the relationship between doctors and hospitals, a Florida whistleblower argues that hospitals have a pattern of violating anti-kickback laws with formerly independent physicians, according to Kaiser Health News.

Michael Reilly, M.D., a retired orthopedic surgeon based in Fort Lauderdale, Florida, said in a whistleblower lawsuit that nonprofit Broward Health maintained "improper financial relationships" with its physicians and paid them kickbacks in exchange for patient referrals. These allegations led the system to pay a $70-million settlement last month, albeit without the admission of wrongdoing typical of such cases. Over the last decade, KHN noted, Broward has ramped up its hiring of independent physicians, paying orthopedists and cardiologists more than $1 million a year and offering executives large bonuses for using such practices to increase the system's revenues and profits.

Reilly was offered such a deal, but declined and filed his whistleblower complaint after his lawyer told him the deal was illegal, according to the article.

Broward Health, Reilly and the Justice Department claimed, tracked its return on investment for each physician hired, following how much revenue referrals generated and putting pressure on any doctors who fell behind to increase volume. The Justice Department has settled more than 12 cases in the past two years under the Stark Law, according to KHN.

"My wish would be that the hospital-physician employee contract would go away," Reilly said. "You could pick just about any hospital, and I will tell you there is a component where that contract is driven by referrals."

Hospital employment of physicians, which is on the rise, particularly among primary care providers, inherently drives such referrals, he said, adding that it also hurts physician innovation.

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