Hospital system settles whistleblower’s claim Greenville surgeons got millions in kickbacks

Bon Secours St. Francis has agreed to pay a $36.5 million settlement after being accused of paying kickbacks to doctors and defrauding the government.
Published: Jun. 15, 2023 at 12:44 PM EDT|Updated: Jun. 16, 2023 at 1:54 PM EDT
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GREENVILLE, S.C. (FOX Carolina) - Bon Secours St. Francis Health System has agreed to pay a $36.5 million settlement after being accused of paying exorbitant yearly kickbacks to doctors and defrauding the federal government.

In 2018, Dr. Daniel Lee, an orthopedic surgeon, came forward accusing Bon Secours of using a scheme to pay millions of dollars to surgeons who generated “significant referrals” to the hospital system.

The 54-page lawsuit alleges Bon Secours didn’t want competition from Piedmont Orthopedic Associates, so they “developed a strategy to lure the POA surgeons into becoming employees of the hospital system by paying them excessive compensation, including an annual bonus pool.”

Lee previously worked for Bon Secours as the chief of orthopedics. He said he witnessed surgeons from Piedmont Orthopedic Associates exerting “unusual power” within the healthcare system.

If their practices had a net loss of less than $3.95 million per year, the whistleblower said Bon Secours would pay the physicians a $3.95 million bonus to divide amongst themselves.

This bonus system started in 2008, according to the lawsuit. In fiscal year 2014, numerous doctors named in the lawsuit allegedly received more money than 90 percent of orthopedic surgeons in the country but collections for their services were in the bottom 25 percent.

The deal is accused of causing thousands of false claims to be submitted to Medicare and TRICARE. It is illegal for doctors to be paid for referrals involving patients insured by federal healthcare programs.

A spokesperson for Bon Secours said the healthcare system denies claims laid out in the lawsuit and said the employment arrangements outlined haven’t been used for years. The settlement resolves the federal lawsuit but does not determine that the healthcare system is liable.

Below is their full statement:

“Medical providers should base health care decisions on what is best for the patient, and not on financial incentives and related schemes,” said U.S. Attorney Adair F. Boroughs for the District of South Carolina.

Lee received $10 million of the settlement.

“This case shows that whistleblowers can have a significant impact by stepping forward in the best interests of patients and taxpayers,” said Bryan Vroon, an Atlanta-based attorney representing Lee.  “I admire Dr. Lee’s courage and determination to not only file the case, but to continue prosecuting the case after the Department of Justice declined to do so. He has great integrity and commitment to compliance with federal laws that protect Medicare, patients, and American taxpayers.”