South Shore Hospital Massachusetts pays $1.8 million in doctor kickback case

The South Shore Hospital of Weymouth Massachusetts will pay $1.8 million to settle state and federal investigations alleging that it was engaged in an illegal kickback scheme, paying doctors to refer patients to services within the hospital’s health care network.The doctors, members of independent physicians groups affiliated with South Shore Hospital, received cash incentives for keeping treatments within South Shore’s system instead of referring patients out of network, according to court documents.

The Government says that the kickbacks included 103 payouts to 33 physician groups over nine years ending in 2010. Those payments continued despite the fact that the hospital’s attorneys and others raised concerns about the legality of the program.

South Shore Physician Hospital Organization, which does contracting and administrative work for South Shore Hospital and its affiliated doctors, denied wrongdoing in settling the case. The nonprofit organization said it self-reported the kickback scheme after an internal investigation in 2012 and cooperated with the investigation by state Attorney General Martha Coakley and US Attorney Carmen Ortiz.

The Government also said that the arrangement deceived patients and limited their choices, ultimately raising medical costs for patients and insurers, including Medicare and Medicaid. Similar incentives are common in other industries but incentives that reward independent doctors for referrals are illegal under state and federal laws, which aim to protect consumers from high costs and unnecessary care.

Jeffrey Newman represents whistleblowers