As reported previously, Hamot Medical Center (“Hamot”) and Medicor Associates, Inc. (“Medicor”) entered into a preliminary settlement agreement under which they agreed to pay $20.75 million to resolve kickback allegations arising under the federal False Claims Act. Last week, the Department of Justice approved the settlement, finalizing the agreement between all parties.

The action arose from a 2010 lawsuit in which Tullio Emanuele, M.D., a cardiologist, alleged that Hamot and Medicor fraudulently submitted claims to Medicare and Medicaid programs, in violation of the federal Anti-Kickback Statute and Physician Self-Referral Law. Specifically, Emanuele alleged that Hamot submitted claims, primarily to Medicare, while paying millions of dollars a year to Medicor under physician and administrative services arrangements. Emanuele claimed that the payments made to Medicor were intended to induce patient referrals. In a March 15, 2017 ruling, the U.S. District Court for the Western District of Pennsylvania held that two of Hamot’s arrangements with Medicor violated the Stark Law.

Emanuele is to receive over $6 million as part of the settlement agreement. The DOJ settlement announcement is available here.