Georgia Doctors, Hospital Settle Medicare Lawsuit for $6.4 Million

October 23, 2006

Atlanta’s Northside Hospital and two doctors groups have agreed to pay $6.37 million to the federal government to resolve allegations in a whistleblower lawsuit.

The suit alleged that the hospital and doctors groups violated the false claims act by submitting claims to the Medicare program that were tainted by improper financial and referral relationships, the U.S. Attorney’s office said.

Northside agreed to pay about $5.72 million and two doctor-owned entities, Blood and Marrow Transplant Group of Georgia and Atlanta Blood Services, agreed to pay $650,000. The U.S. agreed to dismiss the lawsuit in exchange for the payment.

U.S. Attorney David E. Nahmias said the whistleblower suit was filed in February, 2004, by two former BMTGA employees, Cheryl Burns and Janine Slaughter. They contended that BMTGA and Atlanta Blood Center entered into multiple financial transactions with Northside Hospital that violated certain Social Security Act provisions know as the “Stark law.”

That law prohibits a physician from making a referral to an entity for the furnishing of certain health services if the physician has a financial relationship with the entity that does not meet one of the law’s exceptions.

Under provisions of the false claim act, Burns and Slaughter will jointly receive $1.2 million as a share of the recovery under the settlement.

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