SIOUX FALLS, S.D. — Sanford Health has agreed to pay hundreds of thousands of dollars in a settlement with the state of South Dakota over Medicaid claims, state Attorney General Jason Ravnsborg announced Wednesday, Nov. 25.

The Sioux Falls-based health system will pay $329,412.12 to South Dakota, to reimburse the state's share of alleged costs from Medicaid claims made from 2010-2019 by a former Sanford neurosurgeon, Dr. Wilson Asfora. Sanford previously reached a federal settlement over the claims in October 2019, agreeing to pay $20.25 million.

"Sanford Health cooperated fully with the state throughout this matter," Ravnsborg said in a news release. "In reaching this resolution, we are able to ensure the South Dakota Medicaid program is made whole."

Under the settlement terms, Sanford Health doesn't admit liability in agreeing to the settlement, nor does the state budge on its positions that its claims are well-founded.

The announcement marks a public moment for Ravnsborg, who currently remains under investigation for striking and killing a man with his car while driving on a rural highway Sept. 12.

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State officials have said they've determined Ravnsborg was distracted when he drove off the road onto the shoulder and struck and killed Joseph Boever, who was walking along state Highway 14 just west of Highmore.

Ravnsborg, who is directly elected by voters, has said he'll remain on the job as the investigation continues.

After federal settlement, more suits filed

The state settlement is related to Sanford Health's federal settlement agreement reached in late October 2019, in which the health system agreed to pay $20.25 million. The settlement resolved claims that Sanford knew Asfora was defrauding the government through kickbacks from medical devices and unnecessary surgeries but still continued to employ him, even as he filed claims for care to federal healthcare programs.

"Back in 2013, my agency warned that physician distributorships, such as in this case, are inherently suspect under the Anti-Kickback Statute," said Curt L. Miller, special agent in charge for the Office of Inspector General of the U.S. Department of Health and Human Services, in the news release. "We will continue working with Medicaid Fraud Control Units in South Dakota and other states whenever Medicaid funds are threatened."

After the federal government resolved its claims with Sanford Health via the settlement, it then focused specifically on Asfora, taking him to court in November 2019.

The Justice Department claimed Asfora had taken kickbacks from using medical devices sold through companies he owned and performed medically unnecessary surgeries in which he implanted the devices.

In an October filing, Asfora denied many of the claims made by prosecutors, including that he had performed medically unnecessary surgeries or submitted claims to federal health care programs for surgeries where he used devices sold by his company, saying the hospitals had actually done so. That suit remains active in federal court in South Dakota.

Sanford initially defended the neurosurgeon but fired him a month before its federal settlement was announced in October 2019. Asfora then sued Sanford Health in February for firing him, claiming it did so to reach a deal with federal prosecutors and secure a planned merger with UnityPoint Health of Iowa.

The merger later failed. Asfora's lawsuit is ongoing, also in federal district court in South Dakota, with a different judge.