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All Children’s Hospital, Pediatric Physician Services (PPS), and All Children’s Health System in St. Petersburg, FL, have settled a whistleblower lawsuit brought under the False Claims Act for $7 million.
The James Hoyer Law Firm in St. Petersburg announced the resolution. The defendants have agreed to settle allegations that their compensation agreements with certain employed physicians did not comply with federal law. The lawsuit alleged Pediatric Physician Services, which is wholly owned by All Children’s, paid many physicians above market value for their services.
Barbara Schubert, former director of operations at PPS, filed the federal False Claims Act suit in Tampa in July of 2011. Schubert alleged that certain physician compensation agreements between PPS and employed physicians did not comply with the federal Stark statute. To settle the lawsuit’s allegations, the defendants will pay the United States approximately $4 million and the state of Florida approximately $3 million. Schubert will receive a 26.5% share of the recovery.
According to the lawsuit, in her role as the director of operations, the whistleblower developed a compensation model that would guarantee physicians a base salary between the 25th and 75th percentile nationwide, which was developed from the aggregate of three salary surveys. The board of Pediatric Physician Services approved the compensation model that also stated physicians would not be compensated below the 25th percentile or above the 75th percentile.
However, PPS subsequently hired several physicians and provided them with base salaries above the 90th percentile, which was not supported by any model or survey.
The $7 million settlement will resolve all allegations under the lawsuit, and there has been no liability admitted by any party.