Wisconsin-based Agnesian HealthCare and its affiliated physician group paid $10 million to the federal government and the state of Wisconsin to settle a whistleblower case alleging illegal kickbacks.
In 2014, plaintiff Clark Searle, M.D., filed the lawsuit under the qui tam, or whistleblower, provisions of the False Claims Act. Dr. Seale, an employee of Agnesian HealthCare, alleged that the compensation plan for doctors violated the federal False Claims Act, the Wisconsin False Claims for Medical Assistance Law (repealed July 12, 2015), the Stark Law, and the Anti-Kickback Statute.
Dr. Seale alleged that since 1996, Agnesian HealthCare engaged in a scheme to pay improper compensation to physicians to induce them to illegally refer patients to its hospitals and associated medical facilities for medical services paid for by government-funded healthcare programs. The complaint claimed that Agnesian HealthCare gave high-referring physicians additional compensation and over-valued physician services. The complaint also alleged Agnesian HealthCare’s deferred compensation payments limited physicians’ ability to refer patients to competitors.
Federal law prohibits hospitals and other medical providers from paying physicians in exchange for referring them business paid for by government-funded healthcare programs, such as Medicare and Medicaid. Further, claims submitted to government-funded healthcare programs, for services provided pursuant to referrals from physicians with whom the billing provider has improper financial relationships, are false under federal law.
Dr. Searle, an orthopedic surgeon, was recruited to practice at Defendant’s Fond du Lac Regional Clinic in 2006. Dr. Searle’s last day of employment by the Fond du Lac Regional Clinic was July 3, 2017. During this time, Dr. Searle served in several leadership roles with the Fond du Lac Regional Clinic including the board of directors, the professional services agreement committee, and the compensation committee.
Agnesian HealthCare, now a member of SSM Health, is a non-profit three-hospital system in Wisconsin. Agnesian HealthCare also includes over a dozen clinics staffed by the physicians employed by Fond du Lac Regional Clinic. Since 1996, Fond du Lac Regional Clinic has had an agreement with Agnesian HealthCare under which it provides physician services exclusively for Agnesian HealthCare.