In The News

Texas-based Radiation Therapy Company Agrees Pay More than $11 Million to Settle Allegations that it Violated False Claims Act

Alleged violators of the False Claims Act often come up with elaborate schemes when it comes to illegally profiting from government healthcare programs. However, this has not deterred the government in its efforts to crack down on fraud and abuse. Case in point: The justice department announced last week that SightLine Health (SightLine) has agreed to pay $11.5 million to settle allegations that it not only violated the False Claims Act but that it also violated the Anti-Kickback Statute as well. The government alleges that in doing so, SightLine submitted false claims to the Medicare program. Oncology Network Holdings, LLC – which acquired SightLine back in 2011 – will share in the cost of the settlement. The Anti-Kickback Statute – also known as the Stark Law – is designed to ensure that financial incentives do not influence a physician’s medical decisions. It prohibits anyone from offering, paying, soliciting or receiving remunerations for items or services covered by federally funded programs such as Medicare, Medicaid, TRICARE, etc. As is often the case, claims found to be in violation of the Anti-Kickback statute can be subject to the False Claims Act too.

“Investment arrangements that are structured to improperly compensate physicians for referrals can encourage physicians to make decisions based on financial gain rather than the best interest of their patients,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “The Department of Justice is committed to preventing illegal inducements, in whatever form, that undermine the integrity of our public health programs.” The settlement reached last week resolves allegations that SightLine violated the Anti-Kickback Statute and the False Claims Act by targeting physicians who referred patients to cancer treatment centers. Specifically, SightLine is alleged to have formed several leasing companies that allowed referring physicians to invest and profit from such referrals. SightLine is then alleged to have distributed the profits gained through radiation therapy treatments on cancer patients to physicians-investors.

“As the professionals charged with recommending and referring medical procedures for our community, physicians’ primary motivation must remain the well-being of their patients,” said U.S. Attorney Erin Nealy Cox. “Today’s settlement demonstrates our determination to eliminate complex business ventures that improperly interpose financial considerations into our physicians’ medical judgment.”

In addition to having to pay $11.5 million to settle the allegations, ION, SightLine and their related entities have been made to enter into a five-year Corporate Integrity Agreement (CIA) with HHS-OIG. The agreement is intended to increase accountability and transparency and to ensure that SightLine, etc., behaves in an ethical and lawful manner going forward.

“Companies seeking to boost profits by paying physicians kickbacks for patient referrals undermine impartial medical judgment and increase health care costs for everyone,” said Chief Counsel to the HHS Inspector General Gregory Demske. “We will continue to investigate such illegal, wasteful business arrangements in order to protect government health programs and the patients served by them.”

The allegations that are the basis of this settlement were originally the basis of a lawsuit filed under the qui tam or whistleblower, provisions of the False Claims Act. This act permits private parties to sue alleged violators of the False Claims Act on behalf of the government. Plaintiffs can do so by utilizing the services of a qui tam law firm. Qui tam Medicare cases have increased since the government began its crackdown on fraud and abuse back in 2009. Under this law, private parties are then able to share in any recovery. The whistleblower in this case will receive up to $1.725 million.