A Montana hospital and its parent company agreed to a $3.85 million settlement with the government to resolve allegations that they violated the anti-kickback statute, the physician self-referral (Stark) law, and the False Claims Act by providing improper financial benefits to physicians and physician groups who made referrals to the hospital, according to the Department of Justice (DOJ). St. James Healthcare, a hospital located in Butte, Mont., and its parent, Sisters of Charity of Leavenworth Health System, based in Denver, discovered the issues during an internal compliance review and chose to self-disclose the problem and cooperate with the government to reach the settlement agreement. According to the DOJ announcement, St. James and Sisters of Charity allegedly paid improper financial incentives to physicians it was involved with in a joint venture concerning a medical building on the St. James campus. The improper payments took the form of below-market lease rates for the physicians renting space in the building, below-fair market lease rates for the land on which the building was constructed, and other below-fair market value arrangements for the shared facility use and maintenance. In the announcement, U.S. Attorney for the District of Montana Michael W. Cotter said, “We are encouraged […]
A Montana hospital and its parent company agreed to a $3.85 million settlement with the government to resolve allegations that they violated the anti-kickback statute, the physician self-referral (Stark) law, and the False Claims Act by providing improper financial benefits to physicians and physician groups who made referrals to the hospital, according to the Department of Justice (DOJ).
St. James Healthcare, a hospital located in Butte, Mont., and its parent, Sisters of Charity of Leavenworth Health System, based in Denver, discovered the issues during an internal compliance review and chose to self-disclose the problem and cooperate with the government to reach the settlement agreement.
According to the DOJ announcement, St. James and Sisters of Charity allegedly paid improper financial incentives to physicians it was involved with in a joint venture concerning a medical building on the St. James campus. The improper payments took the form of below-market lease rates for the physicians renting space in the building, below-fair market lease rates for the land on which the building was constructed, and other below-fair market value arrangements for the shared facility use and maintenance.
In the announcement, U.S. Attorney for the District of Montana Michael W. Cotter said, “We are encouraged that hospitals like St. James Healthcare are taking these issues seriously by reviewing their operations and making disclosures to the government where necessary.” There is no mention of a corporate integrity agreement (CIA) in the announcement, which may mean that as a result of the self-disclosure, St. James and Sisters of Charity may have avoided the cost and resource consuming requirements of a CIA.
Takeaway: There is usually a benefit of some kind as a result of self-disclosure of compliance problems and issues discovered during internal audits and reviews. Conversely, there can be negative and costly outcomes if a problem is discovered but not reported and later is revealed by a whistleblower or other external party.
