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Democrat-run healthcare network ran massive doctor referral kickback scheme

Healthcare corruption

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(NaturalNews) A major health care group headed up by a big Democratic donor will pay $118 million in order to settle false claims and allegations of fraud that were leveled against the company by whistleblowers, the Washington Free Beacon reports.

In an announcement, the Department of Justice said that the Florida-based Adventist Health System, a nonprofit organization that operates 44 hospitals in ten different cities, will make the massive payment in order to settle claims that the group set up an improper compensation system that paid physicians to refer patients to their hospitals.

"Unlawful financial arrangements between heath care providers and their referral sources raise concerns about physician independence and objectivity," said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department's Civil Division. "Patients are entitled to be sure that the care they receive is based on their actual medical needs rather than the financial interests of their physician."

Part of the compensation provided by Adventist included the lease of a BMW and Ford Mustang for one doctor; offering a $366,000 base salary for a family practice specialist, which is nearly twice as much as the average family practitioner in the area; and giving one dermatologist a bonus of $368,000 and a total salary of $710,000 for working only three days per week.

Largest referral fraud settlement ever

In addition, the health care group was charged with submitting fraudulent claims to Medicare and Medicaid for services rendered to the patients who were improperly referred to their system.

"Adventist-owned hospitals, such as Park Ridge, allegedly paid doctors' bonuses based on the number of test and procedures they ordered," said Acting U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina. "This type of financial incentive is not only prohibited by law, but can undermine patients' medical care. Would-be violators should take notice that my office will use the False Claims Act to prevent and pursue health care providers that threaten the integrity of our healthcare system and waste taxpayer dollars."

The CEO and president of Adventist, Donald Jernigan, is a major political donor in Florida and has provided the Democratic Party nationwide with six-figure financial support.

According to Follow the Money, a political donation-tracking website operated by the National Institute on Money in State Politics, Jernigan's contributions include $30,000 to the Democratic Congressional Campaign Committee (DCCC), $10,000 to the Florida Democratic Party, $5,000 to President Obama's 2012 campaign, and so far, $2,700 to Hillary Clinton's campaign.

The Free Beacon further reported:

The lawsuits against Adventist were initially brought forth in 2012 by Michael Payne, Melissa Church, and Gloria Pryor, who were based out of an Adventist hospital located in Hendersonville, N.C. Sherry Dorsey, the fourth whistleblower, worked out of the company's corporate office.

Each will receive a percentage of the settlement for blowing the whistle on the system's practices.

Sting part of government's anti-healthcare fraud efforts

The $118 million settlement is the "largest health care fraud settlement ever made involving physician referrals to hospitals," said Peter Chatfield, a lawyer with the firm Phillips and Cohen, who represented the whistleblowers in the case.

The payout breakdown is as follows: $115 million of the settlement will go to the federal government, $3.48 million to Florida, $198,453 to North Carolina, $66,897 to Tennessee, and $4,711 to Texas.

"Companies that financially reward physicians in exchange for patient referrals—as the government contended in this case—undermine the physicians' impartial medical judgment at the expense of patients and taxpayers," said Derrick L. Jackson, an HHS special agent. "We will continue to investigate such wasteful business arrangements."

In its statement, the Justice Department noted:

This settlement illustrates the government's emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.

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