A settlement has been reached to resolve False Claims Act allegations against Rialto Capital Management and Current Owner of Indiana Hospital.
The allegations arose from a lawsuit that claimed Rialto and the Kentuckiana Medical Center (KMC), a Indiana-based hospital owned by RL BB, violated the Anti-Kickback Statute (AKS), the Stark Law, and the False Claims Act by engaging in illegal financial arrangements with two doctors who referred patients to KMC.
According to the government, KMC, under the direction of Rialto, provided personal loans to two referring doctors and then repeatedly forbore from requiring repayment of those loans. Allegedly the hospital’s failure to collect on loans to key referral sources constituted a form of remuneration prohibited by both the AKS and the Stark Law.
The Anti-Kickback Statute (AKS) prohibits the provision of remuneration to induce the referral of services or items that are paid for by a federal health care program. The Stark Law restricts financial relationships that hospitals may enter into with physicians who refer patients to them. The False Claims Act prohibits the submission of claims to Medicare for items or services that are tainted by financial arrangements that violate the AKS or the Stark Law.
“When doctors refer patients for tests and medical procedures, they must do so based on their own professional judgment and the medical needs of their patients, not personal financial benefits,” said Assistant Attorney General Jody Hunt for the Department of Justice’s Civil Division. “Illegal financial arrangements between health care providers undermine the integrity of our health care system, and we will continue to pursue those who engage in such conduct.”
The whistleblower, Dr. Abdul Buridi will receive $612,000 from the settlement.
