According to a press release from the Department of Justice, Citizens Medical Center (“CMC”), a county-owned hospital in Victoria, Texas, will pay $21,750,000 to the federal government to settle allegations that it entered into financial relationships with referring physicians in violation of the Stark Statute and knowingly submitted claims for services to federal health care programs in violation of the False Claims Act.

The allegations arose from a suit brought by whistleblowers, known as “relators,” who will collectively receive over $5.9 million from the settlement.  The relators alleged that the hospital paid compensation to several cardiologists that exceeded the fair market value of the services provided to Medicare.  They also alleged that the hospital paid improper bonuses to emergency room physicians for the value of their cardiology referrals and that certain gastroenterologists were paid for “medical directorship” duties related to colonoscopy services that did not involve additional work or responsibilities.

The case is United States ex rel. Parikh, et al. v. Citizens Medical Center, et al., Case No. 6:10-cv-64 (S.D. Tex).