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Florida Hospital System Agrees to Pay to Resolve Liability of Improper Discounts

Baptist Health System, located in Florida, has agreed to pay $1.5 million to resolve allegations that it violated the False Claims Act by knowingly causing its subsidiaries to offer discounts to patients to induce them to purchase or refer Baptist Health services reimbursed by federal health care programs.

In connection with the settlement, the United States acknowledged that Baptist Health took significant steps entitling it to credit for cooperating with the government’s investigation.

The Anti-Kickback Statute prohibits parties who participate in federal healthcare programs from knowingly and willfully paying or receiving any remuneration in return for referring an individual to, or arranging for the furnishing of, any item or services for which payment is made by the federal healthcare programs.

The United States alleged that Baptist Health subsidiaries provided discounts of up to 50% or more on patient cost sharing obligation balances for certain categories of Medicare beneficiaries, chosen by Baptist Health, without regard to any financial need consideration, during the period from January 1, 2016, through August 15, 2022. The United States contends that Baptist Health subsidiaries provided these discounts in exchange for the beneficiaries’ purchase or referral of services by certain categories of Medicare beneficiaries from Baptist Health subsidiaries.

Baptist Health voluntarily self-disclosed this conduct to the United States. In addition, Baptist Health cooperated with the government’s investigation and took remedial measures, including discontinuing its discount policy, conducting an internal compliance review and providing the United States with a detailed disclosure statement and other supplemental information to assist the United States in its investigation.

“The department will continue to rely on the False Claims Act to address the use of prohibited remuneration to induce federal healthcare business,” said Principal Deputy Assistant Attorney General Brian Boynton, head of the Justice Department’s Civil Division. “We encourage providers to mitigate the consequences of prior improper conduct by making timely self-disclosures, cooperating with our investigations and adopting enhanced compliance procedures.”

“This settlement is a great example of our office’s commitment to protecting and preserving taxpayer-funded healthcare programs,” said U.S. Attorney Roger Handberg for the Middle District of Florida. “Self-disclosures like this not only help crucial federal healthcare programs to recoup funds, but are also in the best interests of healthcare providers themselves.”

The resolution obtained in this matter was the result of a coordinated effort between the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, U.S. Attorney’s Office for the Middle District of Florida and Department of Health and Human Services’ Office of Inspector General.

The investigation and resolution of this matter illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse and mismanagement, can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).

Trial Attorney Michael Hoffman of the Civil Division’s Commercial Litigation Branch, Fraud Section and Assistant U.S. Attorney Carolyn Tapie for the Middle District of Florida handled the matter.

The claims resolved by the settlement are allegations only and there has been no determination of liability.

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