Mercy Health agrees to $14.25 million settlement with feds

Settles claim of improper payments to doctors

WASHINGTON -- Cincinnati-based nonprofit healthcare provider Mercy Health has agreed to pay the United States $14.25 million to settle allegations it broke federal law.

Mercy Health agreed to the settlement after federal authorities alleged the organization violated the False Claims Act by engaging in improper financial relationships with physicians, the Justice Department announced Thursday.

Authorities had accused Mercy Health of providing compensation to one oncologist and five internal medicine physicians that exceeded the fair market value of their services. 

Federal law restricts the relationships hospitals can have with doctors who refer patients to them, officials said.

"When physicians are rewarded financially for referring patients to hospitals or other health care providers, it can affect their medical judgment, resulting in overutilization of services and higher health care costs," Acting Assistant Attorney Chad Readler said in a written statement. "In addition to yielding a recovery for taxpayers, this settlement should deter similar conduct in the future and help make health care more affordable." 

Mercy Health self-disclosed the issues to the government, according to the Justice Department.

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