Mercy settles with feds over improper referral allegations

Mercy Springfield Communities and its subsidiary, Mercy Clinic Springfield Communities, agreed to pay the federal government $5.5 million to settle allegations the health system improperly held financial relationships with referring physicians.

The settlement stems from allegations Mercy submitted false claims to Medicare claiming services were rendered to patients who were referred by physicians. The referring physicians allegedly received bonuses based on an improper formula that took into account the value of their referrals, according to a U.S. Department of Justice news release.

Federal law restricts such financial relationships between hospitals and clinics and referring physicians.

“Financial relationships between heath care providers and their referral sources must be structured to comply with all applicable laws,” said Principal Deputy Assistant Attorney General Benjamin Mizer, the head of the Justice Department’s Civil Division, in the release. “When physicians are rewarded financially for referring patients to hospitals or other health care providers, it can affect their medical judgment, resulting in overutilization of services that drives up health care costs for everyone.  

“In addition to yielding a recovery for taxpayers, this settlement should deter similar conduct in the future and help make health care more affordable.”

The feds learned of the activity via allegations brought in a lawsuit by a whistleblower, Dr. Jean Moore, who was employed by Mercy. Moore will receive $825,000 of the settlement funds, according to the release.