Florida-based Baptist Health System agreed to pay $1.5 million to settle self-disclosed violations of the False Claims Act for allegedly offering discounts to patients to induce purchases or refer services reimbursed by Medicare.

Baptist Health will pay $1 million in restitution, according to its settlement agreement signed Friday with the Department of Justice (DOJ) and Department of Health and Human Services’ Office of Inspector General.

In a press release Monday, the DOJ acknowledged the company’s self-disclosure and significant remedial steps, including discontinuing its discount policy, conducting an internal compliance review, providing a detailed disclosure statement, and other information to assist in the agency’s investigation.

The details: From January 2016 to mid-August 2022, Baptist Health allegedly violated the Anti-Kickback Statute by providing discounts of up to 50 percent or more on patient cost sharing obligation balances for certain categories of Medicare beneficiaries without regard to any financial need consideration, the DOJ alleged.

Baptist Health subsidiaries provided these discounts in exchange for the purchase or referral of services, thus causing the submission of false claims to Medicare, the DOJ alleged.

In July 2022, the company self-disclosed certain legacy patient discount policies potentially violated the Anti-Kickback Statute, per the settlement agreement.

“The department will continue to rely on the False Claims Act to address the use of prohibited remuneration to induce federal healthcare business,” said Brian Boynton, head of the DOJ’s Civil Division, in the release. “We encourage providers to mitigate the consequences of prior improper conduct by making timely self-disclosures, cooperating with our investigations, and adopting enhanced compliance procedures.”

Compliance considerations: The company agreed to update its definition of unallowable costs, separately determine and account for unallowable costs, and within 90 days identify to applicable federal healthcare programs any unallowable costs included in payments previously sought by the United States.

Baptist Health did not respond to a request for comment.