Fraud Waste and Abuse Fact – October

Whistleblower Lawsuit Leads to Record Setting Settlement for Adventist Health System

Adventist Health System will pay $118.7 million to the federal government and four states to settle a whistleblower lawsuit filed in December 2012.

The lawsuit alleged that Adventist paid doctors excessive compensation for patient referrals to Adventist-owned health care facilities, including hospitals, clinics and other outpatient facilities in Florida, North Carolina, Tennessee and Texas, according to a statement.

The settlement, which is the largest fraud settlement made involving physician referrals to hospitals, also covers a separate similar suit filed in 2013 with the same law firm Phillips & Cohen.

The complaint says Adventist hospitals paid for:

• The leases of a BMW and a Mustang for a surgeon.
• A $366,000 base salary for a family practitioner that more than doubled the salary of similar practitioners in that area, due to the extraordinarily high level of his facility fee referrals to Adventist for X-ray and CBC tests.
• A bonus of nearly $368,000 plus salary for total annual pay of $710,000 for a dermatologist who worked just three days a week. He also received payments to cover his costs for staff, equipment, supplies and medical malpractice insurance for the remainder of his time spent on his private practice.
• Adventist implemented a corporate policy that directed its hospitals to purchase physician practices and group practices or employ physicians in their surrounding areas in order to control all patient referrals in those locations, Phillips & Cohen’s complaint says.

A large part of the settlement is based on allegations involving Florida Hospital Medical Group, an Adventist-owned physician practice in Florida whose doctors worked at several Adventist hospitals and Adventist-owned outpatient clinics.

The hospitals include Florida Hospital Altamonte, Florida Hospital Apopka, Florida Hospital Celebration Health, Florida Hospital Kissimmee, Florida Hospital Orlando, Florida Hospital Waterman, Florida Hospital for Children and Winter Park Memorial Hospital.