On Tuesday February 24, 2026, the U.S. Department of Justice announced that an Arizona surgical hospital–Southwest Orthopedic and Spine Hospital, doing business as OASIS Hospital–as well as United Surgical Partners International (USPI) and a jointly-owned surgery center (Dignity/USP Phoenix Surgery Centers) agreed to pay $5.6 million to resolve allegations that they violated the False Claims Act (FCA) by submitting claims to federal healthcare programs that were tainted by an improper financial relationship between the hospital and physician practice.
Specifically, the DOJ alleged that for a period of seven years, OASIS made improper financial contributions to Southwest Physicians, a physician group that referred patients to OASIS. The DOJ’s press release alleges that those improper payments took the form of interest payments on convertible bonds issued to the physicians’ group. The DOJ alleged that this arrangement violated both the federal Anti-Kickback Statute (AKS) and the Physician Self-Referral Law, better known as the Stark Law.
This matter was the result of a self-disclosure after the defendants had conducted an internal investigation into the matter and self-disclosed the arrangements to the government. The DOJ’s press release acknowledges that the defendants “took a number of significant steps entitling them to credit for cooperating with the government,” but does not explain how, exactly, that cooperation affected the settlement amount or terms.
This matter should serve as an important reminder that (a) AKS and Stark law enforcement is alive and well and that healthcare providers must ensure that their financial arrangements comply with these two laws, and (b) while self-disclosure is often appropriate, it does not mean that the provider will not face significant liability as a result.
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