West Virginia Hospital to Pay $1.5 Million to Settle Allegations Concerning Impermissible Financial Relationships with Referring Physicians

WHEELING – Weirton Medical Center, a hospital located in Weirton, West Virginia, has agreed to pay $1.5 million to resolve allegations that it violated the False Claims Act by knowingly submitting or causing the submission of claims to Medicare in violation of the Physician Self-Referral Law (commonly referred to as the Stark Law).

“Health care decisions should be based on patients’ medical needs, not physicians’ financial interests,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Department of Justice’s Civil Division. “The department will continue to investigate financial relationships that may improperly influence physician decision-making.”

“Improper compensation arrangements between hospitals and physicians will not be tolerated,” said U.S. Attorney William Ihlenfeld for the Northern District of West Virginia. “The U.S. Attorney’s Office will be aggressive in its pursuit of those who violate the Stark Law and we strongly encourage whistleblowers to come forward.”

“Patients trust their health care providers’ decisions are made based on their individual medical needs and not to increase providers’ profits,” said Special Agent in Charge Maureen Dixon of the U.S. Department of Health and Human Services, Office of the Inspector General (HHS-OIG). “HHS-OIG will continue to work with the U.S. Attorney’s Office to investigate health care fraud allegations and to protect the integrity of the Medicare program.”   

The settlement, which is based on the hospital’s financial condition, stems from a voluntary self-disclosure made by the hospital regarding potential Stark Law violations. The Stark Law prohibits a hospital from billing Medicare for certain services referred by physicians with whom the hospital has a financial relationship, unless that relationship satisfies one of the law’s statutory or regulatory exceptions. The Stark Law is intended to ensure that medical decision-making is not compromised by improper financial incentives and is instead based on the best interests of the patient. The settlement resolves Weirton Medical Center’s liability under the False Claims Act for submitting claims to Medicare that resulted from violations of the Stark Law due to payment of compensation to referring physicians that allegedly exceeded fair market value or took into account the volume or value of the physicians’ referrals to the hospital.

The matter was investigated by Senior Trial Counsel Diana Cieslak and Assistant U.S. Attorneys Stephanie Savino and Christopher Prezioso for the Northern District of West Virginia.

The resolution obtained in this matter was the result of a coordinated effort between the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section and the U.S. Attorney’s Office for the Northern District of West Virginia with assistance from HHS-OIG.

The investigation and resolution of this matter illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse and mismanagement, can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).

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