Oklahoma City Hospital, USP, and Southwest Orthopaedic Specialists Will Pay $72.3 Million Over Illegal Kickbacks

A hospital, the company that manages it, a physician group, and two physicians, all based in Oklahoma, have collectively agreed to pay $72.3 million to resolve allegations that they maintained relationships that violated the Anti-kickback statute.  

A whistleblower complaint exposed the alleged misconduct. The main defendants in the lawsuits are the Oklahoma Center for Orthopaedic and Multi-Specialty Surgery (“OCOM”), its part-owner and manager USP OKC, Southwest Orthopaedic Specialists (“SOS”), and two SOS doctors, Anthony L. Cruse, D.O., and R.J. Langerman.

The whistleblower lawsuit alleges that there was "a conspiracy among numerous Oklahoma orthopedic surgeons, their clinical practice group, the surgical hospital they created, and the corporate entities who purchased and/or control the surgical hospital. Defendants conspired to defraud Medicare, Medicaid, TriCare, and other federal healthcare programs through multiple unlawful schemes. Defendants based years of medical decision-making, including their referral and provision of federally-reimbursed healthcare services, on greed by using illegal kickbacks, unlawful compensation, and unearned reimbursements."  

Offering kickbacks in exchange for referrals is a violation of the Anti-Kickback Statute.

When a physician who has an improper financial arrangement with a hospital, for example, getting paid above market value, refers patients to the hospital for services reimbursed by government programs, the resulting Medicare or Medicaid billings constitute a violation of the Stark Law. According to the whistleblower complaint, the defendants violated both the Anti-Kickback Statute and the Stark Law.

Naturally, physicians who are receiving money or any other material incentive in exchange for referring patients to a specific healthcare provide seldom put the patients´ health and well-being first. Thus, Medicare and Medicaid fraud not only drain the government´s coffers of taxpayer funds, but they also result in physicians making profit-oriented decisions and putting their health at risk.

As the U.S. Attorney for the Western District of Oklahoma put it, "Patients deserve care based on good medicine and informed choice, not the corrupting influence of money and other benefits.  No matter how complex and intertwined modern healthcare economics become, we are committed to ensuring that untainted care is always provided."

Wayne Allison filed the whistleblower lawsuit against the Oklahoma healthcare providers under the False Claims Act (FCA). Insiders who provide information about Stark Law or Anti-kickback violations by filing an FCA complaint can potentially receive up to 30 percent of any recoveries resulting from their lawsuit. In this case, Allison will very likely receive a multimillion-dollar award.

Allison´s lawsuit explains that the alleged misconduct began after USP "purchased an equity interest in and took over management of OCOM." The SOS Doctors and the hospital, the whistleblower alleges, immediately "entered into a series of financial relationships and kickbacks that plainly violate the [federal False Claims Act] and the [Oklahoma False Claims Act]. For over a decade, OCOM annually derived tens of millions of dollars of revenue from tainted referrals from the SOS Doctors." 

Between 2006 and 2018, prosecutors alleged, the hospital and its owner offered SOS physicians a wide-ranging assortment of financial incentives, perks, and benefits to induce referrals. Kickbacks could take the shape of anything from inflated paychecks to free office space, equity buyback provisions, and preferential access to lucrative investment opportunities.   

The Oklahoma Attorney General, Mike Hunter, said in a statement that he hopes the settlement will send a clear message to would-be fraudsters that this type of misconduct will not be tolerated in the state.

Whistleblower Wayne Allison had to endure tremendous adversity in his quest to expose the alleged misconduct. After he left SOS, where he worked in an administrative position, the rumor spread that he was talking to the FBI. SOS then proceeded to sue Allison, alleging that he had taken trade secrets with him upon leaving the company. The case against the whistleblower was eventually dismissed. 


Steve Halperin

New York trial attorney Steve T. Halperin is a well-known litigator with extensive knowledge of whistleblower laws and the New York False Claims Act. He has 28 years of experience as one of New York’s top tier attorneys. From the Manhattan offices of HalperinBikel, Steve’s whistleblower cases can run the gamut from lawsuits against healthcare. Whistleblowers: A New Yorker’s Step By Step Guide systems and providers cheating on New York Medicaid to private companies providing worthless services, or false billings by government contractors. With hundreds of winning verdicts and favorable settlements in healthcare and corporate cases, attorney Halperin’s meticulous preparation, courtroom acuity, and client-centered professionalism create remarkable outcomes.

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