The U.S. Attorney's Office, a subagency of the Department of Justice, has accused Dallas-based Steward Health Care System and its subsidiaries of making false claims to Medicare.

This complaint accuses Steward St. Elizabeth’s Medical Center (SEMC), Steward Medical Group (SMG), in addition to Steward Health Care System.

The government says these organisations breached the federal Stark Law, which prevents physicians from referring patients to receive services payable by Medicare from entities with which the physician has a financial relationship.

SMG hired Dr. Agnihotri as the chief of cardiac surgery at SEMC in Boston in 2012.

It has been alleged that between January 2013 and March 2022, SMG paid Dr. Agnihotri an amount that surpassed fair market value and included an incentive compensation based on the volume or value of his referrals to SEMC.

SMG allegedly paid Dr. Agnihotri around $4,868,500 in incentive compensation based on the number of cases he referred to SEMC.

By increasing the number of cardiovascular surgeries, the health group’s aim was to boost profits through reimbursement from Medicare. 

The government accused SEMC of submitting over 1,000 false claims to Medicare, resulting in tens of millions of dollars in false claims.

US Attorney Joshua S. Levy said: “The government’s complaint today alleges that in its drive to increase cardiac surgeries at SEMC, the defendants entered into improper compensation arrangements with a cardiac surgeon, and knowingly submitted false claims to Medicare.

“We are committed to enforcing the Stark Law, and protecting patients and the Medicare program from financial relationships that can corrupt clinical decision making.”

This case stemmed from a whistleblower's complaint under the False Claims Act.

U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG) special agent in charge Roberto Coviello said: “Improper financial arrangements between hospitals and physicians can compromise medical judgement and threaten the integrity of the Medicare programme.

“Working alongside our law enforcement partners, HHS-OIG will continue to thoroughly pursue allegations of Stark Law violations.”