Stacked physician compensation: Keys to compliance

Bartt B. Warner (Bartt.Warner@vmghealth.com) is a Director and Thomas A. Warrington, Jr. (Thomas.Warrington@vmghealth.com) is a Managing Director with VMG Health and both are based in VMG Health’s Nashville office.

Compensation paid to physicians is under constant scrutiny as the number of healthcare settlements continues to rise both in number and in settlement awards. There has also been a shift by qui tam relators and the government to include both physicians and medical practices in enforcement action cases. Recent settlements have demonstrated the severe financial implications of improper financial relationships as shown in the Table 1.

Table 1: 2015 & 2016 Notable Healthcare Settlement Summary
2015 & 2016 Notable Healthcare Settlement Summary
Year SystemSettlement ReasonAmount
2015Citizens Medical Center[1]Civil FCA allegations that it engaged in improper financial relationships with referring physicians.$21.8 Million
2015North Broward Hospital District[2]Civil FCA allegations that it engaged in improper financial relationships with referring physicians.$69.5 Million
2015Columbus Regional Healthcare System[3]Civil FCA allegations that they submitted claims to federal health care programs that violated the Stark Law and that misrepresented the level of services they provided.$35 Million
2015Tuomey Healthcare System[4]Civil FCA judgment entered against it for illegally billing the Medicare program for services referred by physicians with whom the hospital had improper financial relationships.$72.4 Million
2015Tuomey Healthcare System[5]Former Tuomey Healthcare System CEO (Ralph Cox) - illegal referrals$1 Million
2015Memorial Health, Inc., Memorial Health University Medical Center, Inc., Provident Health Services, Inc., and Memorial Health University Physicians[6]Civil FCA allegations that they engaged in improper financial relationships with referring physicians that violated the Stark Law.$9.9 Million
2016Tenet Healthcare Corp. (Tenet)[7]Allegations of illegal kickbacks paid to clinic owners in exchange for referring patients for labor and delivery to Tenet hospitals.$514 Million
2016Lexington Medical Center[8]Hospital overpaid physicians and rewarded them based on their referral of patients to the facility.$17 Million
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