HCA Inc. to Pay $16.5 Million to Settle Claims that its Hospitals Paid Doctors for Patient Referrals

A whistleblower lawsuit has led to a $16.5 million settlement with HCA Inc., one of the nation’s largest for-profit hospital chains, according to the Justice Department. Two of HCA’s Tennessee hospitals allegedly violated the False Claims Act and the Stark Statute by providing financial benefits to a physician group in exchange for referrals to HCA hospitals.

Defendants Paid Physicians Group to Induce Referrals to HCA Hospitals


In 2007, HCA subsidiaries Parkridge Medical Center in Chattanooga and HCA Physician Services in Nashville provided financial benefits to the physicians group Diagnostic Associates of Chattanooga in order to induce the doctors to refer patients to the HCA hospitals.

The Stark Statute restricts hospitals from entering into financial relationships with physicians who might potentially refer patients to them.  It is unlawful for federal funds to be used to pay medical claims that result from such financial relationships.

HCA will pay $16.5 million. The whistleblower who filed the lawsuit against HCA will receive 18.5 percent of the settlement — more that $3 million.

Whistleblowers Play Important Role in Fighting Fraud Against the Government


Federal authorities often rely on information from whistleblowers to identify and prosecute False Claims Act violations. Information provided by whistleblowers can be so valuable that the qui tam provisions of the False Claims Act allow whistleblowers to sue on behalf of the government and to receive a share of any money recovered.

Whistleblowers should understand their legal rights under the False Claims Act. Waters & Kraus’ highly skilled attorneys have decades of experience working with whistleblowers. Contact us or call our whistleblower attorneys at 800.226.9880 to learn more about our practice and how we can assist.

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