A settlement has been reached to resolve False Claims Act allegations against PAMC Ltd and Pacific Alliance Medical Center Inc, which together own and operate Pacific Alliance Medical Center.
The allegations arose from a lawsuit that claimed PAMC Ltd and Pacific Alliance Medical Center Inc engaged in improper financial relationships with referring physicians.
According to the government, the defendants allegedly submitted false claims to the Medicare and MediCal Programs for services rendered to patients referred by physicians with whom the defendants had improper financial relationships. These relationships took the form of (1) arrangements under which the defendants allegedly paid above-market rates to rent office space in physicians’ offices, and (2) marketing arrangements that allegedly provided undue benefit to physicians’ practices.
The lawsuit alleged that those relationships violated the Anti-Kickback Statute and the Stark Law, both of which restrict the financial relationships that hospitals may have with doctors who refer patients to them.
The settlement calls for PAMC and Pacific Alliance Medical Center to pay $31.9 million to the United States and $10 million to the state of California.
Reportedly, Paul Chan, who was employed as a manager by one of the defendants, brought the suit forward. Chan will receive more than $9.2 million as his share of the federal recovery.
“Federal law prohibits improper financial relationships between hospitals that receive federal health care funds and medical professionals — this is to protect the doctor-patient relationship and to ensure the quality of care provided,” said acting U.S. Attorney Sandra R. Brown. “Patients deserve to know their doctors are making health care decisions based solely on medical need and not for any potential financial benefit.”
With the allegations resolved, the medical center stated that “we look forward to continuing to provide quality, compassionate care to our highly diverse patient population, 95 percent of whom are enrolled in the Medicare and Medi-Cal programs.”
