Pine Creek Medical Center Reaches $7.5M Settlement With Feds Over Alleged Role In Kickback Scheme

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Dallas, Texas – Pine Creek Medical Center LLC (“Pine Creek”), a physician-owned hospital serving the Dallas/Fort Worth area, has agreed to pay $7.5 million to resolve claims that it violated the False Claims Act by paying physicians kickbacks in the form of marketing services in exchange for surgical referrals, the Department of Justice announced today.

The government alleged that, between 2009 and 2014, Pine Creek engaged in an illegal kickback scheme whereby the hospital would pay for marketing and/or advertising services on physicians’ behalf and, in return, the physicians would refer their patients, including Medicare and TRICARE beneficiaries, to Pine Creek.  Among other things, Pine Creek allegedly paid for advertisements on behalf of the physicians in a number of local and regional publications.  Pine Creek also allegedly paid for radio and television advertising, pay-per-click advertising campaigns, billboards, website upgrades, brochures, and business cards, as well as other forms of marketing to induce physicians to refer patients to Pine Creek for medical services.

As part of the settlement, Pine Creek has agreed to enter into a corporate integrity agreement with the Department of Health and Human Services Office of Inspector General (HHS-OIG), which obligates the defendants to undertake substantial internal compliance reforms for the next five years.

The settlement resolves allegations originally brought in a lawsuit filed by whistleblowers under the qui tam provisions of the False Claims Act, which allow private parties to bring suit on behalf of the government and to share in any recovery.  The whistleblowers, Suzanne Scott and Savannah Sogar, former employees of Pine Creek’s marketing department, will receive $1,125,000.

To read the full report, visit justice.gov.

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