Cookeville Regional Medical Center (CRMC) has agreed to pay $4.1 million to settle allegations by the United States and Tennessee that it violated the False Claims Act (FCA). The alleged conduct involved payments to physicians in violation of the Anti-Kickback Statute and Stark Law.

The settlement resolves allegations that from January 2012 through December 2017, Cookeville Regional Medical Center submitted false claims for payments to the Medicare program and to TennCare as a result of violations of the Federal Anti-Kickback Statute and the Stark Law. These violations related to financial arrangements between CRMS and physicians associated with its wholly owned subsidiary physician practice, CRMC MSO-Sub 1, Inc., dba Tennessee Heart.

Under the terms of the agreement, the United States will receive $3,647,155 and the State of Tennessee will receive $452,845.

The allegations resolved by the settlement were originally raised in a lawsuit filed against CRMC by a former employee who brought claims under the whistleblower provisions of the FCA, which allow private citizens with knowledge of false claims to bring civil suits on behalf of the government and to share in any recovery. The whistleblower will receive $779,000 as his share.