Healthcare News & Insights

Settlement agreement in Health Alliance whistleblower suit

A health system accused of illegally providing kickbacks to favored cardiologists has reached an agreement to settle with the feds. And the cardiologist who first brought the case to light stands to make a mint.

The terms of the agreement haven’t been released yet. But Health Alliance of Cincinnati and its former members, including Christ Hospital and St. Luke Hospital, faced a potential liability of more than $420 million.

The allegations? That between 1999 and 2004, time slots at Health Alliance’s “Heart Station” clinic were based solely on which cardiologists/practices had generated the most revenue for Health Alliance. The “Heart Station” clinic provided non-invasive cardiac tests and procedures — many of which were billed to federal health programs.

Dr. Harry Fry, a cardiologist, filed suit under the False Claims Act, claiming that scheduling system amounted to illegal kickbacks to physicians who referred clients to Health Alliance or otherwise generated business for the company. The feds intervened in the suit because federal law makes it illegal to exchange any financial incentive for patient referrals.

The government concedes that none of the patients received improper treatment, unnecessary services or was overbilled as part of the “scheme.”

While the terms of the agreement aren’t yet public, Fry is expected to see a hefty payday. Under the False Claims Act, the person who files the case can receive a portion of whatever funds are recovered.

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