The Kerlan Jobe Orthopaedic Clinic, a sports medicine clinic in Los Angeles, has agreed to pay the United States $3 million to settle allegations that it received illegal kickbacks from HealthSouth Corporation. The Justice Department announced this civil settlement on December 1, 2009.
The settlement resolves allegations that HealthSouth paid kickbacks to Kerlan Jobe in the form of stock option grants, donations to the Kerlan Jobe Foundation, loan forgiveness on an equipment lease, and a disproportionately high ownership interest in a jointly owned ambulatory surgery center.
In exchange for the illegal kickbacks, Kerlan Jobe allegedly referred patients to HealthSouth facilities. As a condition of continued participation in government healthcare programs, Kerlan Jobe was required to enter into a Corporate Integrity Agreement with the Office of Inspector General of the Department of Health and Human Services to address Kerlan Jobe’s financial relationships with referral recipients.
This settlement follows a December 2007 settlement between the United States and HealthSouth in which HealthSouth paid the United States approximately $14.7 million to resolve HealthSouth’s liability for improper financial relationships with Kerlan Jobe and an Alabama sports medicine clinic, which HealthSouth’s then-new management self-reported to the government.
The investigation was a joint effort by the Civil Division of the Justice Department, the U.S. Attorney’s Office for the Central District of California and the Office of Inspector General of the Department of Health and Human Services.
Any questions or comments should be directed to: tgreen@greenassoc.com. Tracy Green is a principal at Green and Associates in Los Angeles, California. They focus their practice on the representation of licensed professionals, individuals and businesses in civil, business, administrative and criminal proceedings. They have a specialty in representing licensed health care providers. Their website is: http://www.greenassoc.com/
