This report originally appeared in the May 2010 issue of DOTmed Business News

Rush University Medical Center has reached an agreement with the Department of Justice regarding allegations that it had violated the False Claims Act. Under the agreement, the facility will pay $1,547,200 plus interest. A whistleblower suit under the False Claims Act had been brought against the facility in 2004. Rush is an acute care facility and teaching and research hospital.

Rush was accused of submitting false Medicare claims between 2000 and 2007, through leasing arrangements for office space with two individual physicians and three physician practice groups. The government says the arrangement violates the Stark Law, which prohibits a hospital from profiting through physician-made patient referrals, when the physician has an improper financial arrangement with the facility. Under the Stark Law, lease arrangements must be consistent with "fair market value." According to the amended complaint in the case, the reported incidences included back rent in medical office buildings and ambulatory services centers being forgiven, practices and physicians being given preferential treatment and charged below fair market value rents, free equipment to some parties who leased space in Rush's ambulatory service center, and improper characterizations and allocations of office space for rent determination.

"The justice department is committed to investigating cases that threaten the integrity of the Medicare program," said Tony West, assistant attorney general for the justice department's civil division. "The department will continue to protect patients by pursuing hospitals that have improper financial relationships with physicians."

More Industry Headlines