2 physician groups agree to pay more than $33M to resolve patient referral kickback case

Emergency room doctor with stethoscope
Two physician groups will pay more than $33 million to settle allegations they received kickbacks in exchange for patient referrals. (Getty/gordonsaunders)

Two physician groups agreed to pay more than $33 million to resolve a government probe into kickbacks for patient referrals.

The two groups, EmCare Inc. and Physician’s Alliance LTD, agreed to the settlement for allegedly receiving illegal remuneration in exchange for patient referrals to hospitals owned by the now-defunct hospital chain Health Management Associates (HMA), according to the U.S. Department of Justice.

Dallas-based EmCare, one of the nation’s largest physician-staffing companies, will pay $29.6 million to resolve allegations that it received money from HMA from 2008 to 2012 to recommend patients be admitted for inpatient care at its hospitals when they should have been treated on an outpatient basis, the Justice Department said.

That cost Medicare about three times as much money. The Justice Department said HMA made bonus payments to EmCare emergency room physicians and tied the company’s retention of contracts and receipt of new contracts to increased admissions of patients from those emergency departments.

In a separate settlement, Physician’s Alliance, based in Lancaster, Pennsylvania, and three of its executives agreed to pay $4 million to resolve allegations it also accepted illegal remuneration from HMA from 2009 to 2012 to refer patient to two of its hospitals, the Justice Department said.

The executives were Lee Meyers, Michael Warren, M.D., and Wallace Longton, M.D. Along with the $4 million, the company and executives will pay a percentage of proceeds from the sale of its interest in a joint venture with HMA.

“The Hippocratic oath enjoins physicians to do no harm, not maximize profits by pocketing illegal referral payments. Physicians that stray from their oath should not be surprised when they come under law enforcement scrutiny,” Nicholas DiGiulio, special agent in charge for the Office of Inspector General of the U.S. Department of Health and Human Services, said in the announcement.

EmCare, however, continues to face questions about its practices. In September, Sen. Claire McCaskill, D-Mo., called out the company for allegedly pressuring ER doctors to order expensive, unnecessary tests for patients. That followed reports of skyrocketing costs at emergency rooms run by EmCare, results the company has disputed.