Akron General Hospital System Agrees to Pay $ 21 Million to Justice Department to Settle Alleged Fake Allegations

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CLEVELAND, Ohio Akron General Health System will pay $ 21.25 million as part of a settlement with the Justice Department for allegations involving the filing of false claims with Medicare, authorities said Friday.

The deal stems from the health care system paying above market fees to physician groups for patient referrals between August 2010 and March 2016. According to the government, the system then submitted claims to Medicare for services provided to patients.

Federal law prohibits hospitals and organizations from paying medical professionals to obtain referrals for services covered by Medicaid and Medicare.

In a statement, the Justice Department cited inappropriate relationships with some referring physicians, resulting in false claims being submitted to the Medicare program.

The Justice Department said the deal also ended a whistleblower case filed by a former director of internal audit with the hospital system and Ethical Solutions LLC. Details of this case have not been made public. A 2015 lawsuit filed in Akron U.S. District Court is sealed, records show.

The Cleveland Clinic acquired the healthcare system in 2015. The system included Akron General Medical Center, Lodi Community Hospital, and the Edwin Shaw Rehabilitation Institute. The move gave the clinic a solid foothold in South Cleveland.

The timing of the takeover seems important.

The Justice Department said federal law prohibits hospitals from filing Medicare claims if facilities have obtained patients through inappropriate relationships with physicians. This includes physicians who are paid well above fair market value for services.

The Justice Department said the clinic voluntarily disclosed to the government its concerns about these indemnification agreements, which had been put in place by the previous management of Akron General Health Systems, and received credit for its cooperation in the resolution reached by the parties.

In 2016, shortly after acquiring the healthcare system, the clinic said it discovered a potential compliance issue with Akron Generals’ contracts with a few of its independent physician groups.

Those contracts were in place before the Cleveland Clinic acquired Akron General, the clinic said in a statement. We promptly reported the matter to the Ministry of Justice and fully cooperated in its investigation. Akron General and the Department of Justice have now reached a settlement.

Several attempts to reach Thomas Tim Stover, the former chairman and CEO of Akron General Health System, have failed.

In a statement released by the Department of Justice, Brian Boynton, Acting Assistant Attorney General, said: Inappropriate payments to physicians for referrals threaten the integrity of our healthcare system and deprive patients of medical decision-making independent they deserve.

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