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Queens Chronicle

MediSys, DOJ settle referral case for $4M

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Posted: Friday, September 15, 2017 4:11 pm

MediSys Health Network, Inc., which owns and operates Jamaica Hospital Medical Center and Flushing Hospital Medical Center, has agreed to pay $4 million to settle allegations that it violated the False Claims Act by engaging in improper financial relationships with referring physicians, according to a statement issued on Wednesday by the U.S. Department of Justice.   

The settlement was announced by Bridget Rohde, acting U.S. Attorney for the Eastern District of New York, Acting Assistant Attorney General Chad Readler of the Justice Department Civil Division, and Scott Lampert, Special agent-in-charge, U.S. Department of Health and Human Services, Office of Inspector General for the New York region.

The government’s investigation revealed that the defendants submitted false claims to the Medicare program for services rendered to patients referred by physicians with whom MediSys had improper financial relationships. 

Those relationships took the form of compensation and office lease arrangements that did not comply with the requirements of the Stark Law, which restricts the financial relationships that hospitals may have with doctors who refer patients to them.

The allegations were brought to the government’s attention through the filing of a complaint under the federal False Claims Act.

One provision of the law allows private citizens to bring suit on behalf of the United States and share in any recovery. 

“Health care providers who enter into improper financial relations with referring physicians compromise the referral process and encourage over-utilization of services, to the potential detriment of both patients and taxpayers,” Rhode said in the press release. “We will hold health care providers accountable for their violations of federal law.”

Authorities also said they hope the action will dissuade other hospitals or networks from similar arrangements with physicians.

Representatives of MediSys could not be reached for comment on this story. 

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