DMC reaches $30M settlement with US Justice Department over alleged kickbacks

The federal government has reached a $30 million settlement with Detroit Medical Center over allegations that certain doctors received kickbacks for referring Medicare patients to the hospital system.

The U.S. Justice Department accused DMC’s Sinai Grace and Harper University hospitals of leasing nurse practitioners and physician assistants for free or at vastly discounted rates to about a dozen doctors between 2014-2017. 

In return, those physicians who have the ability to refer patients from Sinai Grace Hospital and Harper University Hospital would refer patients to the DMC — which is in violation of the Anti-Kickback Statute (AKS).

According to the statement from the Justice Department, the AKS prohibits one from receiving pay to cause referrals of items or services covered by Medicare and other federally funded programs.

“Paying and accepting kickbacks encourages providers to put personal financial gain before the needs of their patients,” says Special Agent in Charge Mario Pinto of the Department of Health and Human Services Office of Inspector General (HHS-OIG).

The Medical Center, its former owner Vanguard and current owner Tenet agreed to the settlement with the government — but none of them admit to any wrongdoing. 

“This outcome makes clear that when doctors refer patients for care at hospitals, they must do so based on their own professional judgment and the medical needs of their patients, not personal financial benefit,” says Dawn N. Ison, U.S. Attorney for the Eastern District of Michigan.

Representatives of Tenet say they fully cooperated with the investigation and that the company did not execute any new lease agreements after it bought the facilities from Vanguard in 2013.