Unless overturned, a recent Court of Appeals decision in a False Claims Act case “may force hospitals to adopt fundamental changes to their compensation practices at significant cost and loss of productivity,” AHA and other hospital groups said in a friend-of-the-court brief filed yesterday in U.S. ex rel. Bookwalter v. UPMC. “In any event, the decision will require hospitals to incur tremendous costs defending against an onslaught of Stark Law litigation.” The three-judge panel reversed a lower court’s decision dismissing a False Claims Act case against the University of Pittsburgh Medical Center that involved productivity-based physician compensation structures between UPMC’s subsidiary physician practices and neurosurgeons. “It cannot be correct that a relator can obtain discovery on a Stark claim by alleging nothing more than that a hospital compensates doctors based on their own work productivity,” the hospital groups wrote. They urged the full 3rd Circuit Court of Appeals to “review the panel’s decision in order to consider a ruling that would avoid the havoc that the majority opinion will otherwise wreak.” Joining the AHA in the brief were the Association of American Medical Colleges, Federation of American Hospitals, Hospital and Healthsystem Association of Pennsylvania and New Jersey Hospital Association.

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