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New Jersey Hospital System Settles Kickback Claims, Pays $12.6 Million

January 28, 2013

The United States and the State of New Jersey have announced a $12.6 million dollar settlement with Cooper Health Systems and Cooper University Hospital (“Cooper”).  Whistleblower Dr. Daniel DePace filed a qui tam False Claims Act suit in 2008, claiming that hospital operator paid bribes to physicians in exchange for patient referrals.  According to Dr. DePace’s complaint, the doctors were paid thousands of dollars to participate in what amounted to a sham “physician advisory board.”  In reality, Dr. DePace alleged, the physicians were not expected to provide any service in exchange for the money, other than the referral of patients to the hospital.

The federal Anti-Kickback Statute and its state equivalents are designed to protect patients’ rights to receive impartial medical judgment by prohibiting the offer or acceptance of any remuneration in exchange for patient referrals.  Dr. DePace alleged that the kickback system designed by Cooper influenced doctors to refer patients based not on the patients’ best interest, but on the illicit financial relationship between Cooper and the doctors.

To report anti-kickback violations or Medicare fraud, contact Frohsin & Barger.

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