THE US ATTORNEY’S OFFICE in Boston on Monday accused Steward Health Care System of making $4.5 million in incentive payments over a nearly 10-year period to Dr. Arvind Agnihotri to illegally refer Medicare patients to the hospital system’s St. Elizabeth’s Medical Center in Brighton, where he worked as the chief of cardiac surgery.
According to the complaint, Steward violated a federal law barring a hospital from billing Medicare for services requested by a physician who stands to benefit financially from the referral. Agnihotri not only was paid an above-market salary but also received payments based on the referrals he made from the time he was hired in late 2012 until he left his post at the end of March 2022, according to the complaint.
The complaint alleges that Agnihotri was recruited in 2012 by Dr. Ralph de la Torre, the chairman and CEO of Steward, who was described as a colleague and friend of Agnihotri. Steward, which originally was founded in Boston, is currently headquartered in Dallas.
The federal lawsuit was prompted by a whistleblower complaint brought by Joseph Nocie, who was the chief financial officer at St. Elizabeth’s from May 2016 to November 2017. He and others at St. Elizabeth’s raised concerns about the financial arrangement with Agnihotri at the time, according to the complaint. Whistleblowers are entitled to anywhere from 15 to 25 percent of any monetary damages won by the federal government.
Officials at Steward in Texas and St. Elizabeth’s could not be reached for comment.
The law Steward allegedly violated is called the Stark Law, which generally bars a physician who receives indirect compensation from a hospital from referring Medicare patients to the hospital. An exception is granted if the physician is paid the going market rate and the compensation is not tied to the referrals.
According to the federal complaint, Agnihotri was paid well above the going market rate for a physician in his position and received incentive payments tied to the number of referrals he made. The lawsuit alleges Agnihotri received compensation both for patients he personally treated at the hospital as well as patients treated by other physicians.
“The government’s complaint today alleges that in its drive to increase cardiac surgeries at Stl Elizabeth’s Medical Center, the defendants entered into improper compensation arrangements with a cardiac surgeon, and knowingly submitted false claims to Medicare,” said acting US Attorney Joshua S. Levy in a statement. “We are committed to enforcing the Stark Law, and protecting patients and the Medicare program from financial relationships that can corrupt clinical decision making.”
In 2022, Steward paid $4.7 million to settle a separate federal lawsuit by the US attorney’s office in Boston. As with the current case, the 2022 settlement alleged violations of the federal False Claims Act. The case centered on payments to physicians or physician groups for services that were never rendered. The physicians, however, did refer patients to Good Samaritan Hospital in Brockton.
In addition to St. Elizabeth’s and Good Samaritan, Steward also operates Carney in Boston, Holy Family in Haverhill, Morton in Taunton, Nashoba Valley in Ayer, Saint Anne’s in Fall River, and Norwood Hospital. Steward recently announced plans to close New England Sinai in Stoughton this spring.
