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 recently.

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.

The 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.

Assistant Attorney General West noted that the investigation was a collaborative 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.

Source: U.S. Department of Justice

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