Penn Highlands Healthcare has agreed to pay $735,000 to resolve allegations of False Claims Act violations, addressing claims that the hospital system, which operates in north, central, and western Pennsylvania, submitted improper claims to Medicare and Medicaid.

The allegations centered on violations of the Physician Self-Referral Law, also known as the Stark Law, which prohibits providers from billing Medicare or Medicaid for certain services referred by physicians with whom the provider has a financial relationship. The Stark Law aims to prevent financial incentives from influencing medical decision-making.

According to the U.S. Attorney's Office, from July 1, 2009, to June 30, 2012, Penn Highlands DuBois, one of the hospitals in the system, allegedly paid improper compensation to Dr. Gary Ott and another physician from Women’s Care of Pennsylvania, Dr. Ott's practice. The payments, totaling $420,000, were made under a consulting, medical director, and related services agreement for services supposedly performed before the agreement was active, during which time neither physician was employed by Penn Highlands DuBois.

The settlement originated from a whistleblower complaint filed in October 2016 under the qui tam provisions of the False Claims Act. The government chose to intervene in the case, and the whistleblower will receive $154,350 from the settlement.

The case highlights the government's ongoing efforts to combat healthcare fraud, with the False Claims Act serving as a critical tool in these endeavors. The U.S. Attorney’s Office for the Western District of Pennsylvania and the Department of Health and Human Services Office of Inspector General managed the case.

The case, United States ex rel. Tuesdae Stainbrook, D.O., M.P.H., Mary Simpson, M.B.A., and Jonathan Pope, M.D. at Civil Action No. 1:16-cv-244, concluded without a determination of liability as the settlement addresses allegations only.

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