The hospital entities of Sanford Health, Sanford Medical Center and the Sanford Clinic (collectively, Sanford) of Sioux Falls, South Dakota, have agreed to pay $20.25 million to resolve False Claims Act (FCA) allegations that they knowingly submitted false claims to federal health care programs, including Medicare, Medicaid and TRICARE, resulting from violations of the Anti-Kickback Statute and medically unnecessary spinal surgeries. The Anti-Kickback Statute prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid and other federally funded programs.

The lawsuit, captioned Bechtold v. Asfora, No. 4:16-cv-04115-LLP (D.S.D.), was brought by two Sanford surgeons, Carl Dustin Bechtold and Bryan Wellman, under the whistleblower or qui tam provision of the FCA, which allows private parties to bring suit on behalf of the government.  Whistleblowers are entitled to bring lawsuits on behalf of the government and may receive a percentage of any recovery won. In this case, the whistleblower physicians will receive $3.4 million of the settlement proceeds for their efforts in bringing this case to the attention of the government.