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June 06, 2019

Indiana Hospital Owner Settles FCA Case Involving Loans to Physicians

A qui tam suit brought against the now-closed Kentuckiana Medical Center (KMC) and its corporate owner settled this week for $3.6 million. The hospital allegedly attempted to award ownership of the hospital to two high referring physicians, but ultimately gave loans to the physicians. KMC then allegedly forbore repayment of those loans for more than two years after the loans matured and became due. According to the DOJ, since the two physicians were “key referral sources” to the hospital, the loan forbearance constituted prohibited remuneration in violation of the AKS and the Stark Law.