Covenant Medical Center to Pay U.S. $4.5 Million to Resolve False Claims Act and Stark Law Allegations

The U.S. Department of Justice issued a press release on August 25, 2009 announcing a $4.5 million False Claims Act Settlement against an Iowa hospital, Covenant Medical Center. The False Claims Act liability allegations were based upon charges by the Attorney General that paying excessive compensation violated the Stark Law.

Based upon IRS 990 forms, the 5 highest paid physicians made between $635,000 to $2.1 million dollars. Two orthopedic surgeons made $2.1 million and $1 million in 2002, and a gastroenterologist was also paid $2.1 million.

Note the action was settled by the hospital, for making false claims for billing prohibited by the Stark Law.