Greenville health care system will pay $36.5M settlement

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A Greenville-based health care system will pay more than $36 million to the United States in a settlement to resolve allegations of false claims.

St. Francis Physician Services Inc., St. Francis Hospital, and Bon Secours St. Francis Health System Inc., owner and operator of the St. Francis healthcare system, a Section 501(c)(3) charitable organization in Greenville, agreed on June 15 to pay $36.5 million to resolve allegations that it violated the False Claims Act, the Federal Stark Law, and the Federal Anti-Kickback Statute by making payments to orthopedic surgeons that were tied to the volume or value of referrals, according to the U.S. Attorney’s Office for the District of South Carolina.

The settlement resolves allegations that St. Francis caused the submission of false claims to Medicare and to TRICARE as a result of an unlawful contractual payment structure between St. Francis and Piedmont Orthopedic Associates, according to a news release. As a result, Piedmont’s compensation was allegedly tied to the volume or value of the practice’s referrals to St. Francis.

Specifically, it is alleged that St. Francis’s bonus payments to Piedmont’s  physicians violated both the Stark Law and the Anti-Kickback Statute, according to the U.S. Attorney’s office.

“Medical providers should base health care decisions on what is best for the patient, and not on financial incentives and related schemes,” said U.S. Attorney Adair F. Boroughs for the District of South Carolina. “We are grateful the relator brought these allegations forward. Relators are critical to identifying fraud and protecting the integrity of our Medicare system.”

The settlement resolves a lawsuit originally brought by a relator under the qui tam, or whistleblower, provisions of the False Claims Act.

Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. As part of this resolution, the relator will receive approximately $10.2 million of the settlement amount. The whistleblower in this case was represented by Bill Nettles and Fran Trapp of the Law Offices of Bill Nettles in Columbia, and Bryan Vroon of the Law Offices of Bryan A. Vroon LLC in Atlanta.  

The claims resolved by the settlement are allegations only, and there has been no determination of liability, according to the release.