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LEGAL UPDATE
their investments than Meridian was, and that only physicians who
referred Medicare patients were permitted to become owners. (See
"Former Business Manager Sues ASC, Corporate Partner Over
Alleged Kickbacks" at tinyurl.com/kdkrpvg).
In the civil action, Mr. Simmons alleges that Treasure Coast and
Meridian defrauded Medicare of an estimated $100 million. Mr.
Simmons contends in court records that the defendants' distributions
to physician-owners were intended as improper compensation for
referrals. As such, they ran afoul of the federal Anti-Kickback Statute.
Because the referrals included many Medicare payments, the distributions also violated the federal False Claims Act, the suit alleges.
In the lawsuit, which federal prosecutors have declined to join, Mr.
Simmons is seeking a jury trial, financial restitution and (in accordance with federal whistleblower law) a share of any recovered
funds.
Meridian and Treasure Coast counter that Mr. Simmons's allegations are false. Their physician-owner distributions, they argue, are
issued strictly in accordance with equity percentages. They also
point out that Mr. Simmons was terminated as business office manager for allegedly misappropriating funds.
Right side of the line
Whatever its eventual outcome, the case shows the scrutiny and risk
that surgical centers face even when entering into common arrangements that are generally viewed as commercially reasonable, and not
fraught with fraud and abuse. Simmons v. Meridian revolves around
business valuation principles, and as such has the potential to bring
more regulatory attention to, and to adversely impact, how ASC transactions are handled. Whistleblower lawsuits often trigger Medicare
fraud enforcement.
N O V E M B E R 2013 | O U T PAT I E N T S U R G E R Y M A G A Z I N E O N L I N E
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