US files complaint against Methodist in unlawful kickback case involving Memphis clinic

Methodist Le Bonheur Healthcare - Memphis
Methodist Le Bonheur Healthcare - Memphis(WMC)
Published: Apr. 12, 2022 at 9:34 AM CDT|Updated: Apr. 12, 2022 at 9:56 AM CDT
Email This Link
Share on Pinterest
Share on LinkedIn

MEMPHIS, Tenn. (WMC) - The U.S. filed a complaint Monday in response to a lawsuit against Methodist Le Bonheur Healthcare and Methodist Healthcare in Memphis regarding violations of the False Claims Act and Anti-Kickback Statute.

The U.S. Department of Justice alleges Methodist unlawfully paid millions of dollars in kickbacks to West Clinic P.C. in exchange for patient referrals.

The kickbacks were disguised through a business integration between Methodist and West where Methodist purchased all of the outpatient locations of the largest oncology practices in the area which were owned by West, according to the DOJ.

At the time of the purchase, Methodist was without a comprehensive cancer treatment center.

The DOJ says through the purchase, Methodist was able to bill Medicare for the facility, components of outpatient treatment, chemotherapy and other drugs provided allowing the company to regain a discount amounting to approximately $50 million in profits in one year.

As the referrals increased, so did the payments to West under the agreement, according to the DOJ’s complaint. The deal between Methodist and West was in place for seven years -- January 1, 2012, through December 31, 2018.

The DOJ also claims the arrangement continued even after the U.S. stepped in to investigate the allegations following the whistleblowers’ lawsuit on May 30, 2017.

Methodist argues the DOJ’s complaint “recycles a familiar set of allegations that mischaracterize the relationship between MLH and West Clinic” and their payments were appropriate.

We reached out to Methodist for a statement on the complaint:

The government’s complaint recycles a familiar set of allegations that mischaracterize the relationship between MLH and West Clinic. As we have said many times since this lawsuit was made public more than two years ago:

The affiliation’s compensation structure was designed by respected outside experts who determined it reflected fair market value for such services. Our payments were appropriate, and MLH received the services due under affiliation agreements. The government’s belated decision to intervene in the suit two years after it declined to do so has changed nothing about the case.

We are proud that our partnership with West succeeded in creating an integrated cancer diagnosis treatment and surgical service that not only improved cancer care, but provided care where it was needed most, reduced health disparities and led to better patient outcomes for the Memphis and Mid-South communities. Indeed, it is undisputed that the affiliation brought much needed cancer care to our community and delivered the highest level of services.

MLH will refute the government’s allegations in detail in the appropriate legal forum. We are confident that we will demonstrate that MLH’s affiliation with West Clinic was proper and reflected customary and legal business arrangements, and that the affiliation with West was in keeping with our mission to provide high-quality, cost-effective patient and family-centered care.

The West Clinic also issued the following statement in response to the complaint:

“West Cancer Center settled with the plaintiffs on the 2017 Qui Tam lawsuit last year and is no longer a defendant. We believe the allegations are totally unfounded but settled to avoid a potentially prolonged lawsuit to focus on caring for our cancer patients. At West Cancer Center and Research Institute, our patients are our top priority, and this lawsuit was a distraction to our mission of providing outstanding cancer care.”

Copyright 2022 WMC. All rights reserved.

Click here to sign up for our newsletter!

Click here to report a spelling or grammar error. Please include the headline.