Phoenix’s OASIS Hospital and two partners agree to pay $5.6 million over alleged kickback arrangements

Federal settlement targets alleged improper financial ties linked to patient referrals

A Phoenix surgical hospital and two business partners have agreed to pay $5.6 million to resolve allegations that financial arrangements with a physician group violated federal safeguards designed to prevent referrals influenced by compensation. The agreement is a civil settlement and does not include a determination of liability.

The settlement involves Southwest Orthopedic and Spine Hospital LLC, which has operated as OASIS Hospital in Phoenix, along with United Surgical Partners International Inc. (USPI) and Dignity/USP Phoenix Surgery Centers LLC. The case centers on a physician group, Southwest Orthopedic and Spine Hospital Physicians Group LLC, described in the settlement as a referral source for patients treated at the hospital.

What conduct was alleged

The allegations cover an extended period, from 2011 through 2018. During those years, OASIS is alleged to have made improper financial contributions to the referring physician group. The arrangement at issue was described as interest payments connected to convertible bonds issued to the physicians’ group.

Federal enforcement authorities alleged that the financial relationship implicated two key statutes often used in healthcare fraud enforcement:

• The Anti-Kickback Statute, which generally prohibits remuneration intended to induce referrals of items or services paid for by federal healthcare programs.

• The Physician Self-Referral Law (commonly called the Stark Law), which restricts billing for certain services that stem from physician referrals when a prohibited financial relationship exists, unless an exception applies.

Authorities also alleged that claims submitted in violation of these statutes can trigger exposure under the False Claims Act, which provides civil remedies for improper claims submitted to government programs.

Disclosure, cooperation, and remedial steps

The settlement describes actions taken after the arrangements were identified internally. USPI disclosed the arrangements to the federal government following a 2019 internal compliance review and an independent investigation. The settlement also states that OASIS and USPI took remedial actions, provided a detailed written disclosure, and cooperated throughout the government’s investigation. The government acknowledged these steps in the resolution.

What the settlement does—and does not—do

The settlement resolves allegations only, without a formal finding of liability.

Civil settlements of this kind typically focus on resolving disputed compliance and billing risks tied to federally reimbursed care. The dollar amount reflects a negotiated resolution rather than a court judgment after trial.

The matter was handled through coordinated work by federal civil fraud enforcement teams and healthcare program integrity investigators. The settlement underscores the compliance scrutiny that can attach to physician-hospital financial relationships when referrals and federal program billing intersect.