Denton-based Horizon Medical Center has reached a $14.2 million settlement with the U.S. government to resolve alleged violations of Medicare regulations and the Stark Law related to its outpatient surgery centers in Dallas County. The U.S. Attorney’s Office for the Northern District of Texas announced the settlement, which addresses potential False Claims Act liabilities stemming from omissions and financial relationships tied to Horizon’s operations.
The settlement comes after Horizon Medical Center, owned by Corinth Investor Holdings, voluntarily disclosed the issues to the Department of Justice (DOJ). Horizon’s disclosure revealed that it had failed to include a “PN” modifier when submitting claims for Medicare reimbursement, which would have flagged services performed at non-exempt outpatient facilities located off-campus in Dallas, Richardson, and Coppell. This modifier is required to distinguish between services performed at on-campus facilities, which are reimbursed at higher rates, and non-exempt off-campus sites, where reimbursements are lower.
Horizon’s self-disclosure also revealed Hospital Department Management Agreements at each surgery center. Under these agreements, Horizon contracted with third-party management companies affiliated with physicians who performed surgeries at the facilities. Additionally, Horizon had Operating Lease Agreements to rent equipment from companies owned, either directly or indirectly, by some of the physicians performing procedures at the centers. These financial relationships, which the Stark Law governs, raised concerns about conflicts of interest, as they involved direct financial ties between Horizon and physician-owners, potentially impacting referral patterns.
“This office will continue to make sure that companies follow the rules of the road when submitting claims to federal healthcare programs,” said U.S. Attorney Leigha Simonton. “And while we will never condone unlawful conduct, we will continue to credit companies that voluntarily self-disclose misconduct prior to the government initiating an investigation.”
The Horizon settlement is one of three recent cases where the U.S. Attorney’s Office for the Northern District of Texas credited companies for voluntary self-disclosure. Each case involved companies that approached the DOJ proactively with information about potential misconduct, earning favorable settlement terms for their cooperation.
In a separate case, Oliver Street Dermatology Management, operating as U.S. Dermatology Partners, paid $8.9 million after disclosing evidence suggesting that former senior managers had attempted to increase the purchase price of 11 acquired dermatology practices in exchange for agreements that providers would refer services to Oliver Street-affiliated entities. This conduct raised concerns under the Stark Law and Anti-Kickback Statute.
In another case, Consolidated Nuclear Security, LLC, which operates the Pantex Nuclear Weapons Plant in Amarillo, paid $18.4 million after disclosing fraudulent timesheet entries by production technicians who claimed work hours they did not perform.
These settlements align with the DOJ’s recent adoption of a voluntary self-disclosure (VSD) policy, which encourages companies to report misconduct, cooperate with investigators, and implement timely remediation efforts. The new policy is aimed at standardizing self-disclosure responses across U.S. Attorney’s Offices, incentivizing companies to maintain robust compliance programs, and fostering a culture of transparency in federal contracting.
Assistant U.S. Attorneys Ken Coffin and Brian Stoltz represented the U.S. government in the Horizon Medical Center case, which was investigated in cooperation with the Department of Health & Human Services Office of Inspector General.
