Sibley Hospital and its parent company, Johns Hopkins Health System, agreed to pay $5 million to settle allegations the hospital billed Medicare for services referred by physicians with whom it had a financial relationship.

In a press release Monday, the Department of Justice (DOJ) said Sibley violated the Physician Self-Referral Law, commonly known as the Stark Law, which requires medical decision-making be based on patients’ best interests and not influenced by financial incentives.

The details: Between 2008 and 2011, Sibley billed Medicare for services referred by 10 cardiologists to whom it was “paying compensation that exceeded the fair-market value of the services provided,” the DOJ said. This behavior was self-disclosed by Sibley and Johns Hopkins to the agency.

“Improper financial arrangements between hospitals and physicians can influence the type and amount of healthcare that is provided,” stated Principal Deputy Assistant Attorney General Brian Boynton.

U.S. Attorney Matthew Graves for the District of Columbia echoed Boynton’s sentiments, emphasizing patients have the right to medical care that is solely about their health. He encouraged those with credible information of care being undermined by outside influences to come forward.

Company response: “Johns Hopkins Medicine discovered and flagged a technical noncompliance with the Stark Act in 2011 as part of the onboarding evaluation for Sibley Memorial Hospital when they were becoming part of the Johns Hopkins Health System,” a spokesperson with Johns Hopkins Medicine said in an emailed statement. “We immediately self-reported and have been working with the [DOJ] to bring closure to the matter in the 12 years since.”

Sibley and Johns Hopkins reached the settlement without admitting or denying any wrongdoing.

Jeff Dale is the Digital Editor of Compliance Week. He previously worked as a copy editor with the Boston Herald and Patriot Ledger in Quincy, Mass., and is a former city editor of The Hour Publishing Co. in Norwalk, Conn.

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