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Stuart O’Neal and Daniel Cutler receive a dismissal with prejudice for a hospital parent company in a claim brought under the federal Anti-Kickback Statute and False Claims Act

Member Stuart T. O’Neal, III and Associate Daniel A. Cutler obtained a dismissal in the United States District Court for the Eastern District of Pennsylvania for a parent company of a co-defendant hospital facing alleged violations of the federal Anti-Kickback Statute and False Claims Act. The plaintiff, who was a physician, entered into two successive on-call agreements with the hospital, where he was paid for the days he worked as the on-call physician. The first contract was terminated after it was learned that the plaintiff had a financial stake in a competing healthcare provider. The plaintiff later entered into a second on-call agreement when the hospital was under new management which permitted him to retain his financial stake in the competing provider. However, he subsequently violated a non-compete clause in that agreement which led to the termination of the contract. After meeting with his attorney, the plaintiff alleged that he realized that both on-call agreements were executed solely to coerce Medicare patient referrals violating the federal Anti-Kickback Statute and the False Claims Act.

Both defendants argued that the plaintiff’s complaint failed to provide a claim in either agreements’ termination provisions that violated the federal statutes. U.S. District Judge Norma L. Shapiro ultimately agreed, dismissing the plaintiff’s complaint for both defendants, with prejudice.

Note: The results obtained in a particular case are heavily dependent on the facts and the law specific to that case.