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Mercy Health to pay $14.25 million fine to Feds

The settlement is for alleged kickbacks to doctors for paying them to refer patients to the hospital.

Cincinnati — Cincinnati-based Mercy Health is forking over more than $14 million dollars to the Feds.

It's over alleged kickbacks to doctors for paying them to refer patients to the hospital.

And it settles what's called a False Claims Act, which fines companies, often in healthcare or pharmaceutical fields, for defrauding governmental programs.

Mercy Health Care is one of the largest healthcare systems in the country, which runs 500 facilities in Ohio and Kentucky. But the government is showing no mercy on Mercy.

The total settlement is $14,250,000 to settle allegations that Mercy Health had improper financial relationships with referring physicians.

According to a memo we obtained from the Justice Department, Mercy Health is accused of paying six employed physicians, one oncologist, and five internal medicine doctors more than fair market value, for referring patients to its hospitals.

Federal law restricts those kinds of financial relationships because the payments could be viewed as kickbacks instead of compensation for medical services they provided.

Mercy Health sent us a statement that says, “During an internal audit... Mercy Health learned that it made errors in the administration of a small number of physician arrangements. Mercy Health promptly disclosed the administrative errors to the federal government, with which it cooperated fully, and is pleased to have resolved the matter."

Chad Readler of the Justice Department said when physicians are rewarded financially for referring patients, it can affect their medical judgment. It may entice them to over use services which leads to higher health care costs.

But this settlement recovers money for taxpayers, and according to the Justice Department, should deter similar conduct in the future and help make health care more affordable.

It's important to note that that despite the fact Mercy agreed to pay all that money, the Justice Department says the claims settled by this agreement are from allegations only.