A Phoenix specialty hospital has agreed to pay $5.6 million to settle federal allegations that it financially rewarded physicians for directing patients to its facility.
The U.S. Department of Justice announced Tuesday that Southwest Orthopedic and Spine Hospital LLC, which operates as OASIS Hospital, will resolve claims that it violated the False Claims Act through improper financial arrangements with doctors.
Federal investigators contend that between 2011 and 2018, the hospital provided payments to a related physicians group by issuing bonds and later paying interest on them. Prosecutors alleged the structure functioned as a financial incentive for doctors to refer patients to the facility — a practice prohibited under federal anti-kickback laws.
In a statement, Assistant Attorney General Brett Shumate said the settlement underscores the government’s commitment to enforcing safeguards meant to preserve independent medical judgment. At the same time, he noted that cooperation and voluntary disclosure are taken into account when resolving such cases.
Officials with the U.S. Department of Health and Human Services Office of Inspector General echoed concerns that financial referral arrangements can inflate healthcare costs and compromise clinical decision-making. Acting Deputy Inspector General Scott Lampert said such schemes risk distorting physicians’ treatment choices.
According to federal authorities, the matter came to light after the hospital conducted an internal audit in 2019 and voluntarily disclosed the payments. Investigators said the hospital and its parent organization cooperated with the inquiry.
The settlement resolves allegations under both the Anti-Kickback Statute — which bars offering or receiving payment in exchange for patient referrals — and the Stark Law, which restricts certain physician financial relationships involving Medicare billing.
The agreement does not include an admission of liability by the hospital.
