September 22, 2020

Volume X, Number 266

September 21, 2020

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Adventist Health System Settles Stark Law & FCA Matters

Adventist Health System (Adventist) entered into a settlement agreement with the United States and with the states of Florida and North Carolina on September 21, 2015, resolving Stark Law issues that Adventist disclosed regarding a certain physician employment compensation model and certain other financial arrangements.  The settlement agreements also fully resolve the allegations in two separate qui tamactions, discussed below.

Adventist’s settlement agreement with the United States does not require that it enter into a Corporate Integrity Agreement with the Office of the Inspector General (OIG).  Adventist paid $115 million to the United States as part of the settlement.

In December 2012, three Adventist employees filed a qui tam action under seal (later amended), on behalf of the United States, Florida, Georgia, Illinois, North Carolina, Tennessee and Texas, alleging violations of the Stark Law and other federal and state laws.

In January 2013, Adventist voluntarily disclosed to the United States Department of Justice that it had submitted claims to the Medicare program pursuant to the referrals of certain physicians that were potentially in violation of federal law.  In April 2013, another Adventist employee filed a second qui tam action under seal (later amended), on behalf of the United States, Florida, Illinois, North Carolina and Texas, alleging violations of the Stark Law and other federal and state laws.

On September 21, 2015, the United States intervened in both qui tam actions with respect to relators’ allegations that were consistent with Adventist’s disclosure of its employment compensation models.  The United States also intervened in the first action with respect to allegations that certain Adventist entities miscoded claims for physician services to Medicare.  The United States declined to intervene, however, in any other allegations in the complaints, including in allegations of violations of the federal Anti-Kickback Statute, and these allegations were dismissed with prejudice by each relator.

While the states of Florida, North Carolina, Tennessee and Texas intervened with respect to certain claims asserted by relators on their behalf, the states of Georgia and Illinois declined to intervene in either action, and the relators’ claims in these two states were dismissed with prejudice as to the relators.

© 2020 McDermott Will & EmeryNational Law Review, Volume V, Number 266


About this Author

Laura Morgan, Health Care Attorney, McDermott Law Firm

Laura B. Morgan is an associate at the law firm of McDermott Will & Emery LLP and is based in the Firm’s Chicago office.  She focuses her practice on counseling hospital and other health care industry clients on a range of regulatory issues, including Federal health care program fraud and abuse, the Stark law and Medicare reimbursement issues.

Laura received her J.D., magna cum laude, and Certificate in Health Law from Loyola University Chicago School of Law.  At Loyola, she was a Beazley Institute for Health Law and Policy Fellow, the...

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