Radiation therapy company SightLine Health pays $11.5 million to settle Medicare fraud and kickback case

SightLine Health LLC (SightLine), which operates radiation therapy centers throughout the United States, will pay $11.5 million to settle a False Claims Act lawsuit alleging that it knowingly submitted claims to the Medicare program that violated the Anti‑Kickback Statute.  Together with Integrated Oncology Network Holdings LLC (ION), which acquired SightLine in 2011, SightLine has agreed to pay the government up to $11.5 million. The Anti-Kickback Statute is intended to ensure that a physician’s medical judgment is not compromised by improper financial incentives and instead is based on the best interests of the patient.  It prohibits anyone from offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid, and other federally funded programs.  Claims submitted in violation of the Anti-Kickback Statute may subject the claimant to liability under the False Claims Act.

The settlement  resolves allegations that SightLine violated the Anti-Kickback Statute and the False Claims Act by targeting physicians that were able to refer patients to its cancer treatment centers, and paid those physicians a share of its profits pursuant to investment arrangements that were set up to allow physicians to profit from their referrals.  Specifically, the United States alleged that SightLine formed a series of leasing companies in which referring physicians were permitted to invest, and through which SightLine allegedly distributed the profits that its physician-investors generated by referring cancer patients for radiation therapy.The allegations resolved by the settlement were brought in a lawsuit filed under the qui tam, or whistleblower, provisions of the False Claims Act. The whistleblower was represented by the firm Morgan Verkamp. The act permits private parties to sue on behalf of the government when they believe that defendants submitted false claims for government funds and to share in any recovery.  The act also allows the Government to take over the case, as it did here in part.  The whistleblower will receive up to $1.725 million.   “Investment arrangements that are structured to improperly compensate physicians for referrals can encourage physicians to make decisions based on financial gain rather than the best interest of their patients,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division.  “The Department of Justice is committed to preventing illegal inducements, in whatever form, that undermine the integrity of our public health programs.”

“As the professionals charged with recommending and referring medical procedures for our community, physicians’ primary motivation must remain the well-being of their patients,” said U.S. Attorney Erin Nealy Cox.  “Today’s settlement demonstrates our determination to eliminate complex business ventures that improperly interpose financial considerations into our physicians’ medical judgment.” In addition to resolving their alleged False Claims Act liability, ION, SightLine, and their related entities have entered into a five-year Corporate Integrity Agreement with the HHS-OIG.  This agreement is intended to increase accountability and transparency and to deter future misconduct.  The Corporate Integrity Agreement includes internal and external monitoring of the relationships between the ION and SightLine entities and referring physician investors.

Jeffrey A. Newman represents whistleblowers