Siva Arunasalam, MD, an interventional cardiologist in Victorville, California, allegedly participated in a complex kickback scheme and has agreed to pay $2 million to settle the allegations.
The High Desert Heart Vascular Institute was sold by interventional cardiologist Siva Arunasalam for an exceedingly high amount of money to Prime Healthcare Services (PHS), Ontario, California. This above the fair market value negotiated by Dr. Prem Reddy, CEO, and M.D. of PHS, was paid by PHS. PHS allegedly wanted Arunasalam to refer patients to Desert Valley Hospital, Victorville, California, in return. The kickbacks paid by PHS to Dr. Arunasalam violated the False Claims Act and the California False Claims Act.
According to the U.S. Department of Justice, a settlement agreement was reached between PHS, Arunasalam, and Dr. Reddy. As a part of the settlement, a combined amount of $35.5 million will be paid by PHS and Reddy. At the same time, Arunasalam will pay $2 million. The amount from the proceedings will be received by the United States and California.
A five-year Corporate Integrity Agreement (CIA) with the U.S. Department of Health and Human Services Office of Inspector General will be initiated by PHS and Dr. Reddy in connection with the settlement.
In a prepared statement, Brian M. Boynton, acting assistant attorney general in the Justice Department's Civil Division, said that the patients are denied independent and objective health judgment from healthcare professionals due to the illegal financial incentives offered to the physicians in return for patient referrals. As a result, the integrity of the health care system is also undermined. The justice department's commitment to protecting federal health care programs is reflected through this settlement.
Tracy L. Wilkison, acting U.S. attorney for the Central District of California, further added that the doctor-patient relationship gets corrupted, and the nation's health care resources are wasted due to these kickbacks designed to increase patient referrals.