Indian-American doctors to pay $37.5 mn to settle allegations of kickbacks


Two Indian-American doctors and one of the largest hospitals in the US have agreed to pay nearly USD 37.5 million to settle allegations of kickbacks for patient referrals, the Department of Justice said.

Southern California-based Prime Healthcare Services and two of its doctors agree to settle whistleblower lawsuits that claimed the hospital system paid kickbacks to one of the physicians and bought his practice for more than it was worth, prosecutors said July 19.

The settlement resolving two cases is a joint resolution with the U.S. Department of Justice and the California Department of Justice.

The federal government and state of California entered into a settlement agreement with the Prime Healthcare Services; Prime’s founder and Chief Executive Officer, Dr. Prem Reddy; and interventional cardiologist Dr. Siva Arunasalam to resolve the alleged violations based on kickbacks paid by Prime to Arunasalam for patient referrals, according to prosecutors.

Under the settlement agreement, Arunasalam will pay $2 million. Reddy has already paid $1,775,000, and Prime has paid $33,725,000.

The United States will receive $35,463,057 of the settlement proceeds, and California will receive $2,036,943.

In 2018, Prime and Reddy paid $65 million to settle unrelated allegations of false claims and overbilling, federal prosecutors said.

“Doctors have a sworn duty to do no harm and to put their patient’s interests first,” said Acting U.S. Attorney Tracy L. Wilkison of the Central District of California.

“Kickbacks designed to increase the number of patient referrals corrupt the doctor-patient relationship and needlessly waste this nation’s health care resources.”

Acting Assistant Attorney General Brian M Boynton of the Justice Department’s Civil Division said, “Offering illegal financial incentives to physicians in return for patient referrals undermines the integrity of our healthcare system by denying patients the independent and objective judgment of their health care professionals.”