Lexington Hospital Executive Involved in Kick-Back Scheme

Former hospital executive Peggy Borgfeld of Lexington and physicians Linh Nguyen, M.D., and Thuy Nguyen, M.D., of Dallas, and Heriberto Salinas, M.D., of Cleburne have agreed to pay a total of $880,199 to resolve False Claims Act allegations involving illegal remuneration in violation of the Anti-Kickback Statute. The parties also have agreed to cooperate with the Justice Department’s investigations of and litigation against other participants in the alleged schemes.

Peggy Borgfeld, the former controller, chief financial officer and chief operating officer Little River Healthcare (Little River), a critical access hospital in Rockdale, agreed to pay $325,000 plus additional contingent payments to resolve allegations that she caused the submission of false claims to Medicare, Medicaid and TRICARE. Borgfeld allegedly knew that Little River paid commissions to recruiters who used MSOs to pay kickbacks to doctors to induce their laboratory testing referrals to Little River. The settlement resolves allegations that Borgfeld knowingly caused Little River to submit claims to federal healthcare providers for the laboratory tests that the kickback recipients referred to Little River.

The settlement also resolves allegations that, despite her knowledge of the MSO kickbacks, Borgfeld signed false certifications in Medicare cost reports regarding Little River’s compliance with the Anti-Kickback Statute. Under the terms of the settlement agreement, Borgfeld agreed to be excluded from participation in federal healthcare programs for five years.