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Detroit Medical Center to Pay Feds $30 Million to Settle Doctor-Hospital Kickback Allegations

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The Detroit Medical Center has agreed to pay federal authorities $30 million to settle claims that it engaged in improper financial relationships with referring physicians. According to Justice Department authorities, the settlement is to resolve allegations that the DMC violated several federal laws, including the Anti-Kickback statute and the Stark statute–both of which restrict hospitals from having financial relationships with doctors that refer patients to them.

Furthermore, according to the Justice Department, most of the improper relationships between the DMC and doctors included office lease agreements and independent contractor relationships that violated fair market value, or that weren’t put into writing. The Justice Department also said that it discovered the improper relationships from the DMC itself. In fact, the hospital reportedly discovered the problem while preparing for sale of its facilities to Vanguard Health Systems, Inc., which is headquartered in Nashville, TN.

The Assistant Attorney General for the Justice Department’s Civil Division recently stated:

"Improper financial relationships between heatlh care providers and their referral sources can corrupt a physician’s judgment about a patient’s true healthcare needs. In addition to yielding a substantial recovery for taxpayers, this settlement could deter similar conduct in the future and make health care more affordable for patients."