Major Florida Hospital System Agrees to Record $70 Million Medicare Settlement

Resolves Whistleblower Suit on Physician-Compensation Violations

One of the nation’s largest public hospital systems, South Florida’s Broward Health, has agreed to pay $69.5 million plus interest to settle allegations that it violated Medicare billing laws that ban paying physicians for referrals. The agreement is the largest settlement without litigation ever reached under the law prohibiting physician compensation that presents a financial conflict of interest.

The settlement announced today is between Broward Health, the U.S. Department of Justice, the U.S. Department of Health and Human Services Office of Inspector General, and a whistleblower who filed the legal action against Broward Health.

The settlement stems from a 2010 whistleblower complaint brought by Dr. Michael T. Reilly, a Ft. Lauderdale orthopedic surgeon who alleged that Broward Health violated the Physician Self-Referral Law, commonly called Stark Law, by paying physicians based in part on referrals to Broward Health hospitals. The Stark Law bans compensating employed physicians based on “the volume or value of referrals” to avoid financial incentives that may not be in patients’ best interests and that drive up Medicare costs. It also bans billing Medicare for those referrals.

The Complaint and the Settlement Agreement address Broward Health’s alleged over-compensation of certain employed physicians across multiple specialties, including cardiology, orthopedic surgery, and oncology. The Complaint was filed under the provisions of the False Claims Act, which permits whistleblowers to bring a lawsuit on behalf of the federal government.

‘”The Stark laws provide important protections for patients,” said Bryan Vroon, the Atlanta-based attorney who represented Dr. Reilly. “This case shows that whistleblowers can have a major impact by stepping forward in the best interests of patients and taxpayers. I admire Dr. Reilly’s courage and convictions in his 12-year effort to bring reform to Broward Health.”

“As a result of this investigation, Broward Health has announced a major new policy for physician compensation that will not pay physicians based on the value of referrals,” said Dr. Reilly. “This change in policy, settlement agreement, and the Corporate Integrity Agreement are important for reform and patient care at Broward Health.”

In addition to the $69.5 million payment to the government, the settlement requires Broward Health to enter into a Corporate Integrity Agreement with the U.S. Department of Health and Human Services Office of Inspector General. The Corporate Integrity Agreement obligates Broward Health to undertake substantial internal compliance reforms and submit its federal health care program claims to independent review for the next five years.

The agreed whistleblower award to Dr. Reilly will be $12,045,655.51. Broward Health has also paid Dr. Reilly’s attorney’s fees and expenses.

The claims settled by the Settlement Agreement with Broward Health are allegations only, and there has been no determination of liability by a court of law. The legal action against Broward Health was settled before active litigation and before the Court’s determination of liability.

For further information, please contact Bryan Vroon at (404) 441-9806 or [email protected].

Please click here for the Third Amended Complaint Filed on Pacer
Please click here for the Signed Settlement Agreement