Florida children’s hospital settles whistleblower suit for $7 million

All Children’s Hospital in St. Petersburg, Fla., has reached an agreement with the government to settle allegations that it violated the Stark laws by paying inflated salaries and bonuses to doctors who brought in more patients and revenues for Medicaid-covered services.

The case stems from a whistleblower (qui tam) lawsuit filed nearly three years ago by Barbara Schubert, the former director of operations for the hospital’s doctors’ practice. She claimed that while working for All Children’s for more than a decade, she became aware that the hospital was not following standard methods for setting fair market value for physician salaries and instead was paying whatever it would take to induce physicians to join All Children’s. She also claimed that physicians were promised “significant bonuses based on the number of procedures performed” at the hospital and that the hospital overpaid doctors by about $5 million just in one year.

According to the terms of the settlement, All Children’s hospital will pay the federal government about $4 million and the state of Florida about $3 million. As the person who brought the alleged violation of the Stark laws prohibiting paying doctors to induce referrals, Schubert will receive almost $2 million of that amount, reports the Tampa Bay Times.