U.S. ex rel. Perales v. St. Margarets Hosp. — Feb. 2003 (Summary)

U.S. ex rel. Perales v. St. Margaret’s Hosp.
No. 98-1354 (C.D.Ill. Feb. 7, 2003)

A physician who had a deteriorating contractual relationship with a hospital sued the hospital under the False Claims Act, alleging that the hospital purchased several private practices and then immediately employed or contracted with the selling physicians. The United States District Court for the Central District of Illinois dismissed the physician’s lawsuit, finding that he failed to produce sufficient evidence that the hospital had violated the Stark Law, Antikickback Law, or False Claims Act in its purchase of physician practices, loans to physicians, or leases of office space and equipment. In so holding, the court looked with favor on the hospital’s use of independent consultants to provide market valuations prior to purchasing the physician practices, as well as the hospital’s use of institutional lending advisers to establish interest rates on physician loans. The court also noted that a contractual requirement that a physician maintain active staff privileges at a hospital is not the same as requiring physicians to refer cases to that hospital.