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A group of orthopedic and anesthesia providers in Newnan, Georgia, has agreed to pay $3.2 million to the United States to settle civil charges that they engaged in an unlawful kickback scheme, federal prosecutors in Atlanta announced.

The providers involved in the settlement are Georgia Bone & Joint; Summit Orthopaedic Surgery Center; Southern Crescent Anesthesiology; Sentry Anesthesia Management and certified registered nurse anesthetist specialist David LaGuardia.

LaGuardia, Sentry and Southern Crescent allegedly violated the False Claims Act by providing a free medical director to Summit Orthopaedic Surgery Center to induce it to perform more procedures at the surgery center rather than in the Georgia Bone & Joint office, according to the Department of Justice.

(Related: Long-Term Care Provider Agrees to $10M Settlement Over Medicaid Billing)

The government also alleges that Georgia Bone & Joint and LaGuardia submitted false claims to Medicare for prescription drugs not approved by the U.S. Food and Drug Administration and bought outside the United States.The claims resolved by the settlement were allegations only, and there was no determination of liability, according to federal prosecutors.

In a statement, Georgia Bone & Joint and the Summit Orthopaedic Surgery Center denied the allegation that it participated in any kickback scheme.

The companies “continue the surgical practice in the same manner and location as before the settlement,” according to the statement. “The government has unlimited resources at their discretion while small corporations have limited resources. Unfortunately, a settlement was a necessity, considering the cost of time and money to continue this litigation process of defending our position of innocence.”

Barry Cranfill, the president and CEO of Sentry, which shares a phone number with Southern Crescent, referred requests for comment to lawyer David Walbert of Parks, Chesin & Walbert in Atlanta. Walbert did not respond by deadline. LaGuardia did not respond to an emailed request for comment on Tuesday morning. Georgia Bone & Joint and the Summit Orthopaedic Surgery Center are represented by Kathleen McDermott of Morgan, Lewis & Bockius. Lawyers for Southern Crescent Anesthesiology and LaGuardia could not immediately be determined.

The April 2013 False Claims Act lawsuit was filed by whistleblower Sharon Kopko, who formerly was a nurse and nurse manager at the Summit Orthopaedic Surgery Center and later the administrator of the surgery center and Georgia Bone & Joint, according to court documents. The government did not specify how much money Kopko will receive for her share of the recovery. The civil lawsuit, captioned United States ex rel. et al. v. Georgia Bone & Joint et al., was filed in the U.S. District Court for the Northern District of Georgia.

“Kickbacks should never play a role in medical decision-making,” Northern District of Georgia U.S. Attorney Byung J. “BJay” Pak said in a statement. “It is critical to our health care system that patients seeking health care know that their providers’ recommendations are based on what is in the patient’s best interests and not influenced by illegal kickbacks or arrangements.”

Kopko was represented by Michael Sullivan of Finch McCranie, as well as Gregory Simpson of the Simpson Law Firm in Fayetteville. Attorneys for the providers could not immediately be determined. Assistant U.S. Attorneys Darcy Feuerzeig Coty and Neeli Ben-David reached the settlement on behalf of the government.

— Read Kmart to Pay $32M in Whistleblower Settlement Over Alleged Drug Overcharges on ThinkAdvisor.

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