Citizens Medical Center to Pay $21.75 Million to Settle False Claim Charges

Citizens Medical Center, a county-owned hospital in Victoria, Texas, will pay $21,750,000 to settle allegations that it violated the False Claims Act by engaging in improper financial relationships with referring physicians.


The settlement resolved allegations that the hospital provided compensation to several cardiologists that exceeded the fair market value of their services.

The settlement also resolved allegations that the hospital paid bonuses to emergency room physicians that improperly took into account the value of their cardiology referrals.

The United States contended that these agreements violated the Stark Statute and the False Claims Act.

The Stark Statute restricts the financial relationships that hospitals may have with doctors who refer patients to them.

The allegations settled today arose from a lawsuit filed by three whistleblowers, Dakshesh “Kumar” Parikh, Harish Chandna and Ajay Gaalla, under the qui tam provisions of the False Claims Act.

Under the act, private citizens can bring suit on behalf of the government for false claims and share in any recovery.

The whistleblowers will collectively receive $5,981,250 from the recoveries.



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