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Detroit Medical Center Pays $30M, Settles Anti-Kickback and Stark Claims, Sells to Vanguard

January 2, 2011

Tennessee-based Vanguard Health System, Inc. will purchase Detroit Medical Center, a non-profit owner-operator of Detroit outpatient hospitals. But first Detroit Medical Center will have to repay $30 million to settle alleged False Claims Act, Anti-Kickback Statute, and Stark Act violations, says DoJ. Apparently, the hospital paid what may have been characterized as illegal kickbacks to referring physicians and disguised them as office lease agreements and independent contractor relationships. Detroit Medical Center self-disclosed the problems that were likely discovered during due-diligence for the sale to Vanguard.

To report Anti-kickback violations or False Claims Act violations, contact Frohsin & Barger.

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