United States of America and the State of California ex rel. Laurie M. Hanvey v. Sutter Health, Sutter Health Sacramento Sierra Region d/b/a Sutter Medical Center, Sacramento, a/k/a Sutter Roseville Medical Center, a/k/a Sutter Amador Hospital, a/k/a Sutter Auburn Faith Hospital, a/k/a Sutter Davis Hospital, a/k/a Sutter Solano Medical Center; Sutter Medical Foundation; Sutter East Bay Hospitals d/b/a Alta Bates Summit Medical Center, a/k/a Sutter Delta Medical Center; East Bay Perinatal Center d/b/a Alta Bates Summit Perinatal Center; East Bay Cardiac Surgery Center Medical Group; Sutter Medical Center, Castro Valley d/b/a Eden Medical Center; Eden Medical Center, d/b/a San Leandro Hospital; Sutter East Bay Medical Foundation; Sutter Central Valley Hospitals d/b/a Memorial Medical Center, a/k/a Memorial Hospital Los Banos, a/k/a Sutter Tracy Community Hospital; Sutter Gould Medical Foundation; Sutter Connect LLC d/b/a Sutter Physicians Services; Sutter Medical Group; Sutter Independent Physicians; East Bay Physicians Medical Group Inc.; Sacramento Cardiovascular Surgeons Medical Group Inc.; East Bay Perinatal Medical Associates; Bay Area Surgical Specialists Inc., f/k/a East Bay Vascular Group; Stephen K. Liu, M.D.; California Emergency Physicians Medical Group f/k/a Sutter Emergency Medical Associates
Published: Sep. 11, 2020 | Result Date: Nov. 15, 2019 | Filing Date: Sep. 10, 2014 |Case number: 4:14-cv-04100-KAW Settlement – $30,500,000
Judge
Court
USDC Northern District of California
Attorneys
Plaintiff
Kimberly Friday
(Office of the U.S. Attorney)
Elizabeth S. Voorhies
(Office of the Attorney General)
Defendant
Katherine A. Lauer
(Latham & Watkins LLP)
Facts
The Physician Self-Referral Law also known as the Stark Law bans hospitals from billing Medicare for services referred by physicians with whom that hospital has a business relationship with subject to a few exemptions. Relator Laurie M. Hanvey filed a lawsuit on behalf of the United States of America and State of California against defendants Sutter Health and Sutter Health Sacramento Sierra Region doing business as Sutter Memorial Center Sacramento alleging that defendants violated the Stark Law and the False Claims Act.
Contentions
PLAINTIFF'S CONTENTIONS: Plaintiffs contended that defendants engaged in fraud in violation of the Stark Law by devising a scheme where they entered into compensation arrangements with Sacramento-based physicians and paid these physicians unlawful kickbacks and compensation exceeding the fair market value of services, then billing Medicare. Plaintiffs contended that defendants thereby submitted false and fraudulent claims to Medicare.
DEFENDANTS' CONTENTIONS: Defendant denied plaintiff's contentions.
Result
Defendant Sutter Memorial Center Sacramento agreed to settle the case for $30.5 million.
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