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A Hawthorne-based physician has settled allegations that he violated the False Claims Act by receiving kickbacks and other improper payments in exchange for referring patients to Memorial Hospital of Gardena.

Dr. Ashok Kumar paid $215,228 on March 1 to settle the allegations brought against him in a whistleblower lawsuit that Memorial Hospital of Gardena provided compensation to Kumar, whom they hired as a medical director, that both exceeded the fair market value of his services and was an attempt to incentivize him to refer patients to their hospital.

The lawsuit alleged that Kumar violated the federal Anti-Kickback Statute as well as the Physician Self-Referral Law. The Anti-Kickback Statute imposes civil liability on those who willingly offer, solicit, receive or pay any sort of compensation in exchange for the referral of services provided by a federal health care program, including Medicare. The Physician Self-Referral Law, commonly known as the Stark Law, bans doctors from referring patients to receive designated health care services payable by Medicare or Medicaid from entities with which the doctor or an immediate family member has a financial relationship.

The settlement resolves allegations originally brought in a lawsuit by Dr. Joshua Luke, the former chief executive officer of Memorial Hospital of Gardena, against Kumar and other defendants under the whistleblower provisions of both the federal and California False Claims acts. Both statutes permit private parties to sue on behalf of the state and federal governments for false claims for government funds, and to receive a share of any recovery.

Dr. Luke will receive $42,529 from the federal government as his share of the recovery announced today. His allegations against the other defendants were resolved in 2018 when they agreed to pay the federal government an $8.1 million settlement. The allegations brought on behalf of the State of California have been resolved pursuant to a separate agreement.

This case was handled by Assistant United States Attorney Frank D. Kortum of the Civil Fraud Section, who worked closely with the U.S. Department of Health and Human Services – Office of Inspector General. Tips and complaints from all sources about potential fraud, waste, abuse and mismanagement can be reported to the Department of Health and Human Services, at 800-HHS-TIPS (800-447-8477).

The case is United States of America ex rel. Luke, State of California ex rel. Luke v. Gardena Hospital, L.P. DBA Memorial Hospital of Gardena, Avanti Hospitals, LLC, et al., CV 15-8732-MCS.