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Insight and commentary on qui tam law in Oregon

Kickbacks disguised as “affiliations”

Methodist Le Bonheur Healthcare and Methodist Healthcare-Memphis Hospitals pay $7.25 million to resolve whistleblower claims

Close-up Of Two Businesspeople Shaking Hand And Taking Bribe Under Wooden Table On Grey Background

January 23, 2024

A kick back is basically a bribe. A Referring Business sends a customer to a Serving Business. The patient pays the Serving Business which sends part of the payment back to the Referring Business. I scratch your back, you scratch mine. Nice and cozy.

In the healthcare context, the customer is a “patient” who is rarely the ultimate payor of the services. Often, the ultimate payor is Medicare or Medicaid aka the federal government.

The federal government does not like cozy, back-scratching relationships when it comes to healthcare. It prefers to prevent “money from influencing where a doctor refers a patient for treatment to keep doctors focused solely on what is best for the patient.” When I say prefers, I mean outlaws. There’s a law against these types of referrals, or kickbacks, when it comes to healthcare decisions.

Businesspeople Shaking Hands And Taking Bribe Under Table

Close-up Of Two Businesspeople Shaking Hand And Taking Bribe Under Wooden Table On Grey Background

For at least eight years, Methodist hospitals in Nashville violated that law:

Methodist had a multi-agreement affiliation with the West Clinic and the University of Tennessee Health Science Center. The affiliation agreements with the West Clinic included an Asset Purchase Agreement, Management Services Agreement, Leased Employee and Administrative Services Agreement, and Professional Services Agreement. According to the complaint, Methodist used these agreements as a vehicle to pay kickbacks to the West Clinic in part to induce the West Clinic to refer Medicare beneficiaries to Methodist.

There were two whistleblowers: Jeffrey Liebman and David Stern. Liebman was a former president of Methodist University Hospital, and Stern was a former Dean of the University of Tennessee Health Science Center. Anyone can be a whistleblower!

If you would like to report healthcare fraud, you can contact attorneys at Markowitz Herbold PC. Vivek Kothari is a former federal prosecutor who represents whistleblowers. For a free consultation, you can contact Vivek at 503-274-7425 or