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HCA Inc. Agrees to Pay $16.5 Million to Settle False Claims Act Allegations

Last week, the Department of Justice announced a settlement it reached with HCA Inc., one of the country’s largest for-profit hospital chains.  The $16.5 million settlement marks the end of a case brought against HCA alleging violations of the False Claims Act and the Stark Statute.

According to the complaint, HCA entered into numerous financial transactions with a physician group, Diagnostic Associates through its subsidiaries Parkridge Medical Center and HCA Physician Services.  HCA was accused of providing financial benefits to Diagnostic Associates in order to induce the physicians there to refer patients to HCA facilities.  Some of these benefits included rental payments for office space leased from Diagnostic and a release of Diagnostic members from separate lease obligations.  These transactions violated the False Claims Act as well as the Stark Statute which restricts the types of financial relationships hospitals and physicians can enter into.  In addition to the monetary settlement, Parkrdige Medical Center has agreed to enter into a five year Corporate Integrity Agreement with the Office of the Inspector General of the US Department of Health and Human Services.

Whistleblower Thomas Bingham brought HCA’s alleged fraud to the government’s attention in 2008.  Bingham is a real estate appraiser in Tennessee where Parkridge, HCA Physician Services, and Diagnostic Associates all operate.  He will be receiving an 18.5% share of the settlement recoveries for the role he played in the case.  The remainder of the settlement will be divided between the federal government and the state of Tennessee with the United States getting about $15.6 million.

For more information on unlawful kickbacks and other illegal financial arrangements, visit our website at

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