Former hospital CEO Jeffrey Madison has agreed to pay $5,343,630 to settle allegations under the False Claims Act. The claims involve illegal payments to physicians for laboratory referrals, violating the Anti-Kickback Statute. Madison will also cooperate with ongoing Justice Department investigations related to these allegations.
"The Justice Department will continue to pursue individuals — including C-suite executives — who commit health care fraud," stated Brian M. Boynton, Principal Deputy Assistant Attorney General of the Civil Division. "Kickbacks to physicians from laboratories or other healthcare providers can undermine healthcare decision-making, subject patients to unnecessary medical services and waste taxpayer funds."
The Anti-Kickback Statute prohibits offering or receiving remuneration for referrals covered by Medicare, Medicaid, and other federal programs. It aims to ensure medical providers' decisions are not influenced by financial incentives.
The settlement resolves accusations that Madison, former CEO of Little River Healthcare in Rockdale, Texas, was involved in a scheme where Little River paid recruiters commissions through management service organizations (MSOs) for laboratory testing referrals from January 2015 to June 2018. Madison allegedly signed false certifications regarding compliance with the statute in Medicare cost reports.
Additionally, it resolves claims that Madison agreed for Little River to pay Doyce Cartrett Jr., M.D., kickbacks disguised as medical director fees between February 2015 and May 2017. These payments were intended to induce Dr. Cartrett's referral of laboratory tests without providing genuine services.
Madison did not contest the allegations and accepted responsibility in an amended complaint filed by the United States. As part of the settlement agreement, he is excluded from participating in federal healthcare programs for 25 years.
"Seeing past a corporate entity and holding individuals responsible...is what justice requires," commented U.S. Attorney Damien M. Diggs for the Eastern District of Texas on the settlement's significance against healthcare fraud.
"Illegal kickback payments...undermine and corrupt the medical decision-making process," added Jason E. Meadows from HHS-OIG.
"Our nation’s uniformed military service members...should never have to question the integrity of their healthcare providers," said Ryan Settle from DCIS about protecting trust in patient care through this settlement.
The resolution resulted from coordinated efforts between various government agencies including HHS-OIG and DCIS. Over $52 million has been recovered concerning MSO-related kickbacks involving multiple health care providers.
Trial Attorneys Christopher Terranova and Gavin Thole alongside Assistant U.S. Attorneys James Gillingham and Betty Young handled this case which emphasizes combating health care fraud using tools like the False Claims Act.
Tips about potential fraud can be reported at 1-800-HHS-TIPS (800-447-8477).
