HCA, one of the largest for-profit hospital chains nationwide, has agreed to pay the United States and the state of Tennessee $16.5 million to settle allegations arising from its Parkridge Medical Center facility in Chattanooga. A financial arrangement between Parkridge Medical Center and physician group Diagnostic Associates of Chattanooga triggered the allegations that Parkridge violated the False Claims Act and the Stark Statute. It is alleged that Parkridge made rental payments for office space leased from Diagnostic at a rate well above fair market value. Additionally, Parkridge allegedly released certain members from separate lease obligations. All of this was done in an attempt to induce the physician members to refer patient to HCA facilities.
While no determination of liability has been made, in addition to the monetary settlement Parkridge has agreed to enter into a five year Corporate Integrity Agreement with the government. The Relator, Bingham, who initially brought the allegations to the government’s attention will receive an 18.5% share of the settlement. The federal portion of the recovery represents $15.693 million of the $16.5 million total settlement.
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