Christ Hospital, Health Alliance Settlement for Kickback Allegations

The Health Alliance of Greater Cincinnati and one of its member hospitals, The Christ Hospital, have agreed to settle claims alleging violations of the Anti-Kickback Statute and the False Claims Act for $108 million. Dr. Harry Fry, the whistleblower in the lawsuit and also a cardiologist who formerly worked at The Christ Hospital, alleged that the hospital limited work at its outpatient cardiology testing unit, known as the Heart Station, to those physicians who referred to the hospital. In particular, certain physicians who accounted for two percent of the hospital's referrals were given a corresponding percentage of time at the Heart Station to perform additional procedures in which they could bill and generate additional income. The government believed that the time given to the referring physicians at the Heart Station constituted remuneration in exchange for the physicians' referrals to The Christ Hospital. Dr. Fry will receive $23.5 million as a result of being the whistleblower in this suit.

Representatives of the hospital deny all allegations but state that the motivation for the settlement was to avoid a potential billion dollar judgment that could have resulted had the hospital litigated the issue and lost. Such a large judgment would likely have interfered with the hospital's ability to provide medical services to the community.

The settlement reminds hospitals that certain physician benefits, such as paid call coverage arrangements and other opportunities that can generate income for physicians, should be allocated equally to all physicians on the medical staff and not based in any manner on the volume or value of referrals from the physicians. If such benefits, or opportunities, are based on the volume or value of the physicians' referrals, the Anti-Kickback Statute and False Claims Act may be implicated.