Sports medicine clinic to pay $3 million over alleged kickbacks

A prominent Los Angeles-area sports medicine clinic has agreed to pay $3 million to the federal government to settle allegations that it received illegal kickbacks for referring patients to another healthcare provider, authorities said Tuesday.

The Kerlan-Jobe Orthopaedic Clinic allegedly received kickbacks from the HealthSouth Corp. in the form of stock-option grants, donations to the Kerlan-Jobe Foundation, loan forgiveness on an equipment lease and a high ownership interest in an ambulatory surgery center owned by the two healthcare firms, according to the U.S. attorney’s office.

In exchange, Kerlan-Jobe allegedly referred patients to HealthSouth facilities for medical care, federal prosecutors said.

“Lining the pockets of physicians corrupts clinical judgment,” George Cardona, acting U.S. attorney in Los Angeles, said in a statement. “Referrals should be based on quality of care for the patient, not the financial benefit for any physician or healthcare company.”

Representatives for Kerlan-Jobe and HealthSouth could not be reached for comment.

Kerlan-Jobe has offices in Westchester, Beverly Hills, Pasadena and Anaheim. Its doctors have performed procedures on pro athletes, including New England Patriots quarterback Tom Brady, who had reconstructive surgery last year on his left knee.

Kerlan-Jobe physicians have also served as team physicians or consultants to professional teams in Southern California, including the Lakers, Dodgers, Anaheim Mighty Ducks and the Galaxy.

The clinic was founded by Dr. Robert K. Kerlan and Frank W. Jobe in 1965 as the Southwestern Orthopaedic Medical Group. The name was changed to Kerlan-Jobe in 1985, according to clinic’s webpage. Kerlan was the team physician for the Dodgers when they moved to Los Angeles in 1958.

Under terms of the agreement, Kerlan-Jobe has two weeks to pay the settlement.

The settlement comes after a December 2007 settlement between the federal government and HealthSouth, which paid $14.7 million to resolve liability for alleged improper relationships with Kerlan-Jobe and a sports clinic in Alabama, according to the U.S. attorney.

robert.lopez@latimes.com