HCA off the hook for claims it gave sweetheart deals to docs

By | August 2, 2019

Dive Brief:

  • The U.S. Court of Appeals for the Eleventh Circuit threw out a whistleblower’s suit against hospital giant HCA, meaning the chain won’t face liability for violations of the federal anti-kickback statute.
  • The whistleblower’s claims involved a medical office building in Independence, Missouri, and a hospital complex in Aventura, Florida.
  • Thomas Bingham’s suit against HCA claimed doctors were given sweetheart real estate deals in exchange for referring patients to HCA hospitals. Bingham has previously sued HCA over leasing agreements for a medical office building in Chattanooga, Tennessee.

Dive Insight:

HCA is likely breathing a sigh of relief after an appeals court ruled cash flow participation agreements it reached with doctors who leased space in its hospital and medical office buildings weren’t illegal kickbacks.

Bingham, a real estate appraiser in Tennessee, alleged HCA violated the Anti-Kickback Statute and the Stark statute by providing lucrative deals to doctors who rented space in medical office buildings in Centerpoint Medical Center in Missouri and Aventura Hospital in Florida in return for $ 260 million in Medicare and Medicaid payments stemming from patient referrals.

But the three-judge appeals court panel affirmed the trial court’s November 2016 dismissal of the case, finding, among other things, that Bingham failed to show HCA provided remuneration to the physician tenants of Centerpoint.  In addition, the appeals court said Bingham failed to show any connection between allegedly favorable rental rates or other benefits given to physician tenants were correlated with the volume or value of referrals from those tenants.

“In this case, there is no genuine factual dispute over whether a prohibited indirect compensation arrangement under the Stark statute exists because it plainly does not,” the appeals court’s panel opinion said.

And the panel also affirmed the trial court’s dismissal of Bingham’s claims related to the Aventura facility because the complaint failed to allege the fraud with the required amount of specificity. Bingham, the panel wrote, didn’t provide specific details or evidence to support his claims that physician-tenants’ long-term leases were either undervalued or contained overly generous terms.

And it said Bingham could not use information acquired through post-complaint discovery to bolster its original complaint. Among other things, allowing whistleblowers to use information developed in discovery to buttress their complaint could encourage plaintiffs to bring barebones suits to extract settlements.

This isn’t the first time Bingham has sued HCA. In a prior suit involving similar allegations against HCA over Tennessee’s Parkridge Medical Center, HCA settled the claims for $ 16.5 million in 2012, and a 18.5% share of the recovery went to Bingham as a whistleblower under the False Claims Act.

Healthcare Dive reached out to HCA and to counsel for Bingham for comment but no one was available to respond.

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