Physician Compensation

On October 2, 2013, the federal district court in Columbia, South Carolina imposed a landmark $237 million judgment in a much-discussed False Claims Act case which was predicated on violations of the Physician Self-Referral (Stark) Law, U.S. ex rel. Drakeford v. Tuomey Healthcare System, Inc.1 The case was originally filed as a qui tam case in 2005 by a physician, Michael Drakeford. The federal government intervened in the case in 2007. 

The relator Drakeford and the government alleged that Tuomey Healthcare System (Tuomey) had established employment relationships with certain referring physicians which did not meet a Stark Law “exception,” thus tainting all Medicare referrals and claims submitted by Tuomey for services resulting from these physicians’ referrals. The physicians, employed through Tuomey’s affiliated medical practice groups, were part-time employees and their compensation covered only the physicians’ outpatient surgery services. The physicians’ salaries were adjusted according to collections received by the hospital for the services personally performed by the physicians. The physicians also received productivity and quality bonuses based on a percentage of these collections. 

Continue Reading Landmark False Claims Act Judgment: What Hospitals and Healthcare Providers Should Know