Sanford Health Entities to Pay $20.25 Million to Settle Allegations Regarding Kickbacks, Unnecessary Spinal Surgeries

DOJ:

The Department of Justice announced today that hospital entities Sanford Health, Sanford Medical Center, and Sanford Clinic (collectively, Sanford), of Sioux Falls, South Dakota, have agreed to pay $20.25 million to resolve False Claims Act allegations that they knowingly submitted false claims to federal healthcare programs resulting from violations of the Anti-Kickback Statute and medically unnecessary spinal surgeries.  The Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid, and other federally-funded programs. 

“Kickbacks can compromise a physician’s medical judgment, result in unnecessary procedures, and increase healthcare costs for everyone,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division.  “We will continue to hold healthcare providers accountable when they violate the rules intended to safeguard the integrity of federal healthcare programs and the welfare of their beneficiaries.”

The settlement announced today resolves allegations that Sanford knew that one of its top neurosurgeons was improperly receiving kickbacks from his use of implantable devices distributed by his physician-owned distributorship (POD).  Sanford allegedly received warnings from the neurosurgeon’s physician colleagues and others about the alleged kickback scheme and was aware of the heightened compliance risks associated with PODs.  In addition, the neurosurgeon’s colleagues and others repeatedly warned Sanford that the neurosurgeon was performing medically unnecessary procedures involving the devices in which he had a substantial financial interest.  The United States alleged that, despite these repeated warnings, Sanford continued to employ the neurosurgeon, continued to allow him to profit from the devices he used in surgeries performed at Sanford, and continued to submit claims to federal healthcare programs for these surgeries, including procedures that were medically unnecessary.  read more