WASHINGTON – The St. John Health System, headquartered in Tulsa, Okla., will pay more than $13 million to settle allegations that it violated the False Claims Act, according to the Justice Department.

According to investigators, the health system allegedly submitted claims to Medicare and Medicaid that were tainted by financial relationships with referring physicians. Specifically, St. John was charged with making payments to 23 physicians or physician groups to induce referrals for medical services.

Federal law prohibits healthcare providers from billing a federal healthcare program for referrals from doctors with whom the providers have a financial relationship, unless that relationship falls within certain exceptions. Also, the Anti-Kickback Statute prohibits the payment of kickbacks for the referral of services that are paid for under a federal healthcare program.

In April 2008, St. John submitted a self-disclosure report to the Department of Health and Human Service’s Office of the Inspector General acknowledging that the physician agreements might have violated federal law. The health system has agreed to pay $13,229,348.88 to settle the charges.

"The resolution of this matter yielded a substantial recovery for taxpayers, and it underscores our commitment to ensure that services reimbursable by federal healthcare programs are based on the best interests of patients rather than the personal financial interests of referring physicians," said Tony West, Assistant Attorney General for the Department’s Civil Division.

"This case reflects how we work with providers who self-disclose serious misconduct to efficiently and fairly reach a resolution that protects federal healthcare programs and their beneficiaries," said Daniel R. Levinson, Inspector General for the Department of Health and Human Services.