On December 12, 2018, Aurora Health Care (Aurora), a Wisconsin-based healthcare system, entered into a settlement agreement with the United States and the State of Wisconsin to pay $12 million to resolve allegations that Aurora violated the False Claims Act by submitting claims to Medicare and Medicaid in violation of the Stark Law. The investigation that led to the discovery of the allegedly improper physician compensation arrangements resulted from a qui tam lawsuit filed under the False Claims Act, in which the whistleblowers had alleged different violations than those that were the basis for the government’s settlement with Aurora. 

The government alleged that over the course of several years, Aurora entered into compensation arrangements with two physicians that violated the Stark Law and then submitted claims to the government for services ordered by those physicians in violation of the False Claims Act.  According to the government, the physicians’ arrangements did not comply with the Stark Law because they were not commercially reasonable.  The government also alleged that the physician compensation exceeded the fair market value of the physicians’ services, took into account the physicians’ anticipated referrals, and was not for identifiable services. 

The press release from the U.S. Attorney’s Office, Eastern District of Wisconsin, is available here.