Union General Hospital (“UGH”), located in Blairsville, Georgia, has agreed to pay $5 million to resolve allegations that it violated the False Claims Act by engaging in improper financial relationships with referring physicians.

“It is imperative that all medical decisions are based on the best interest of the patient not on financial gain,” said U.S. Attorney Byung J. “BJay” Pak.  “This settlement demonstrates our commitment to ensuring healthcare providers stay focused on the patient and not enriching themselves.”

“It is a priority for the FBI to protect taxpayers from those who would circumvent our healthcare laws,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “Not only do taxpayers lose, but so do citizens who count on programs like Medicare for their healthcare needs.”

“It is unacceptable for hospitals to provide financial incentives to induce physicians to steer patients their way, said Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta.  “The OIG will vigorously pursue providers who enter into arrangements that can potentially corrupt medical decision making.”

In early 2016, the U.S. Attorney’s Office for the Northern District of Georgia initiated a civil health care fraud investigation into UGH after receiving information from law enforcement agents who arrested several UGH employees for alleged criminal misconduct regarding controlled substances.  Shortly after these arrests, UGH replaced the majority of its executive team, conducted an internal investigation, and voluntarily disclosed significant amounts of information related to several financial relationships with physicians and physician practices. 

This settlement resolves allegations that UGH engaged in several different improper financial relationships with physicians between 2012 and 2016, in violation of the Stark Law. The Stark Law forbids hospitals from billing Medicare for certain services referred by physicians who have a financial relationship with the hospital unless the relationship falls within a defined exception. The United States alleges that the relationships UGH had with certain physicians were prohibited because UGH compensated the physicians in amounts that were above or inconsistent with fair market value or in a manner that took into account the volume or value of the physicians’ referrals.

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

This case was investigated by the U.S. Attorney’s Office for the Northern District of Georgia, the U.S. Department of Health & Human Services Office of Inspector General, and the Federal Bureau of Investigation, with assistance from the Tactical Diversion Squad from the Drug Enforcement Administration.

The civil settlement was reached by Assistant U.S. Attorneys Lena Amanti and Gabriel Mendel.

The Board of Directors for Union General Hospital (Union General) today announced a signed settlement agreement with the Department of Justice regarding a limited number of financial arrangements between the hospital and several physicians. The settlement brings closure to the investigation with no admission of misconduct by the hospital.

Union General brought forward to the government all of the issues addressed in the settlement after completing a rigorous internal compliance investigation. The hospital utilized the government’s voluntary self-disclosure protocol to self-report the infractions and cooperated fully with the government’s investigation.

“We are glad to have reached a settlement so we can continue to focus fully on what we do best: providing the highest level of healthcare for the families in Union County and the surrounding areas” said Myron Turner, Chairman of the Board of Union General, Inc. “Our number one priority is quality care for our community.”

In 2016, following the discovery of the infractions, the Board of Directors of Union General Hospital replaced nearly all of the executive management team, instituted a robust new compliance program and put in place other safeguards to protect the integrity of the hospital and its ability to provide the highest quality of care to Union County residents. The Board of Directors dedicated extensive resources to continue expanded access to specialty services with the highest quality equipment, facilities and exceptional staff. Since then, patient satisfaction scores have risen, and Union General remains a 4-star hospital.