By Bruce Japsen
| Rush University Medical Center agreed this afternoon to pay a $1.5
million settlement to resolve allegations of defrauding the federal
Medicare health insurance program for the elderly.

The U.S. Justice Department said Rush submitted false claims to Medicare
from 2000 to 2007 by entering into improper lease agreements with two
individual doctors and three group practices in violation of the
so-called “Stark Law,” which prohibits a hospital from making money off
of patient referrals made by a doctor “with whom the hospital has an
improper financial arrangement.”

“The Justice Department is committed to investigating cases that threaten the integrity of the Medicare program,” said Tony West, Assistant Attorney General for the Justice Department’s Civil Division in Washington. “The department will continue to protect patients by pursuing hospitals that have improper financial relationships with physicians.”

The civil allegations were brought to the attention of the Justice Department thanks to whistle blowers who sued the hospital in 2004 under the federal False Claims Act. That law permits private citizens to sue on behalf of the federal government and share in the settlement.

The Justice Department said whistleblowers Dr. Robert Goldberg, an orthopedic surgeon on Rush’s medical staff, and former Rush director of real estate June Beecham, will receive $270, 760. Neither could be reached this afternoon for comment.

Rush said in a statement released this afternoon that the government “found a limited number of technical violations” that resulted in a “total sum of the benefits allegedly received by these doctors amounted to $547,000, about one-third of the total monetary penalty.”

“The remaining portion of the approximately $1.6 million settlement includes a multiplier of damages and a separate penalty for unsigned leases,” the Rush statement said. “Rush had initiated efforts to correct the problems raised in the government’s inquiry before the formal subpoena was received. Because Rush satisfactorily resolved the issues underpinning these technical problems, the government will not require Rush to have an ongoing Corporate Compliance Agreement or Corporate Integrity Agreement.”