MEMPHIS, Tenn. — The U.S. Attorney’s Office has filed the suit against Methodist in Memphis, Methodist Le Bonheur and Methodist Healthcare Memphis Hospitals.

The Department of Justice alleges Methodist paid unlawful kickbacks to West Clinic in exchange for West’s patient referrals after purchasing its outpatient locations.

A press release from the U.S. Attorney said the government started investigating wrongdoing in response to a whistleblower lawsuit filed back in 201, but it wasn’t until this week that the Department of Justice got in on the suit, filing this complaint Monday that seeks to recover hundreds of millions of dollars.

The Department of Justice said Methodist received increased Medicare reimbursements related to the cancer care, resulting in $50 million in profit in one year alone.


The suit also says Methodist knew West was not providing cancer care services at all of its locations, but continued to pay it millions. Now the Department of Justice wants reimbursement for false Medicare claims submitted by Methodist.

Methodist Le Bonheur Hospital said in a statement:

The government’s complaint recycles a familiar set of allegations that mischaracterize the relationship between MLH and West Clinic. As we have said many times since this lawsuit was made public more than two years ago:

The affiliation’s compensation structure was designed by respected outside experts who determined it reflected fair market value for such services. Our payments were appropriate, and MLH received the services due under affiliation agreements. The government’s belated decision to intervene in the suit two years after it declined to do so has changed nothing about the case.

MLH will refute the government’s allegations in detail in the appropriate legal forum. We are confident that we will demonstrate that MLH’s affiliation with West Clinic was proper and reflected customary and legal business arrangements, and that the affiliation with West was in keeping with our mission to provide high-quality, cost-effective patient and family-centered care.

In a statement on behalf of CEO Mitch Graves, the West Cancer Clinic & Research Institute said the following:

“West Cancer Center settled with the plaintiffs on the 2017 Qui Tam lawsuit last year and is no longer a defendant. We believe the allegations are totally unfounded but settled to avoid a potentially prolonged lawsuit to focus on caring for our cancer patients. At West Cancer Center and Research Institute, our patients are our top priority, and this lawsuit was a distraction to our mission of providing outstanding cancer care.”