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Brockton Urology Clinic Settles Case and Admits It Took Apparent Kickbacks. What About the Payer of the Kickbacks?

Late yesterday, February 15, 2022, the U.S. Attorney’s Office in Boston announced that Brockton Urology Clinic LLC (Brockton Urology), a physician practice located in North Easton, Massachusetts, agreed to pay $100,000 to resolve False Claims Act allegations that it took money from a hospital to run a clinical program that never existed. Specifically, according to the admitted statement of facts in the settlement agreement, in 2011, a Steward hospital, Good Samaritan Medical Center (Good Sam), contracted with Brockton Urology to administer a “Prostate Center of Excellence” at Good Sam. Although Good Sam paid Brockton Urology for the next six years under this agreement, Good Sam never created the “Center of Excellence,” and Brockton Urology never ran it. Meanwhile, perhaps revealing the true purpose of the agreement, “Brockton Urology referred patients to” Good Sam.

The settlement agreement raises at least three unresolved issues.

First, the agreement never cites the statutory predicate for Brockton Urology’s False Claims Act violations. Did the government believe that Brockton Urology’s receipt of the payments from Steward violated the anti-kickback statute or the Stark Law? The settlement agreement does not answer this question.

Second, the settlement with Brockton Urology is relatively small, and likely does not compensate the government for the value of the apparently kickback-tainted referrals Brockton Urology sent to Good Sam. The settlement agreement indicates that Brockton Urology provided financial statements to the government, so the low settlement amount likely reflects Brockton Urology’s representations that it did not have the financial resources to compensate the government fully for the harm it caused.

Third, what about Steward? In the government’s press release, Phillip Coyne, the HHS-OIG Special Agent in Charge for New England, said ““This settlement sends a clear message that these types of financial arrangements will not be tolerated.” Will the government make good on Special Agent Coyne’s word? The agreement strongly implies that Steward paid Brockton Urology to get referrals for Good Sam. Such conduct would appear to violate the anti-kickback statute, 42 U.S.C. § 1320a-7b(b)(2). Presumably, the government soon will be announcing another, larger, settlement with Steward, or a complaint against Steward. According to its website, Steward is the nation’s “largest private, physician-led health care network,” and thus is unlikely to be able to plead inability to pay compensation to the government for any kickback-tainted claims it may have caused.