On April 13, the United States Attorney’s Office for the Northern District of Georgia announced that it had reached a settlement with Paul D. Weir, John R. Morgan, M.D., Care Plus Management, LLC (“Care Plus”), and over a dozen anesthesia companies that Care Plus owned, to resolve allegations that they had violated the False Claims Act and the Anti-Kickback Statute.  The settlement includes a payment of $7.2 million to resolve the allegations.  Weir and Morgan created and owned Care Plus, which they allegedly used to provide kickbacks to physicians to refer patients to the anesthesia companies owned by Care Plus.  The alleged kickbacks included shared revenue for the anesthesia services and subsidized drugs, supplies, and equipment.

The government alleged that, between 2012 and 2016, Care Plus offered partial ownership interests in anesthesia companies in order to entice outpatient surgery centers to enter into exclusive services agreements with Care Plus – agreements that are incredibly important in the anesthesia industry and typically the subject of aggressive competition.  The agreements with Care Plus allegedly removed the need for competition on quality and price, to the detriment of patients and federal health care programs.  The government further alleged that subsidized drugs and supplies were used to lure outpatient surgery centers into exclusive agreements by lowering the costs of performing surgery.  The original lawsuit was a qui tam filed by a relator, who received $1.3 million from the settlement.  Significantly, the defendants have not admitted any of the allegations, and the settlement is not a determination of liability.  This is an important distinction as defendants often seek settlement to avoid the cost of protracted litigation and trial despite remaining steadfast that they have not acted unlawfully in any way.

In its press release, the government emphasized the importance of doctors selecting the recipients of referrals based on the needs of the patient and the quality of the referred provider rather than the expectation of a monetary return for such referrals.  This is one of the policy considerations underlying the Anti-Kickback Statute and the Stark Law.  Patients, and as a corollary, the federal healthcare programs funding a patient’s treatments, benefit and are better served when their physicians do not have financial interests that could conflict with the provision of the best care possible.  Georgia’s Attorney General, Chris Carr, echoed concerns that such financial arrangements undermine the public’s trust in the healthcare system. 

The attorneys at Chilivis Grubman represent clients of all types and sizes in connection with False Claims Act investigations and qui tam litigation.  If you need assistance with such a matter, please contact us today.