Halifax Health agrees to in­ter­nal mon­i­tor­ing as part of land­mark set­tle­ment

Modern Healthcare - - REGIONAL NEWS - —Joe Carl­son

Florida’s Halifax Health will pay what may be a record-break­ing $85 mil­lion set­tle­ment and hire two com­pli­ance of­fi­cials who will file reg­u­lar re­ports with HHS as part of an outof-court agree­ment that al­lows the hospi­tal to avoid be­ing banned from the Medi­care pro­gram.

The Day­tona Beach hospi­tal was fac­ing a to­tal li­a­bil­ity of $343 mil­lion for al­legedly over­pay­ing six med­i­cal on­col­o­gists and three neu­ro­sur­geons, ac­cord­ing to the set­tle­ment of a whis­tle-blower law­suit last week in U.S. District Court in Or­lando.

The hospi­tal’s physi­cian ser­vices di­rec­tor, Elin Bak­lid-Kunz, said the pay­ments vi­o­lated the Stark law ban on overly lu­cra­tive pay­ments to Medi­care physi­cians, trig­ger­ing po­ten­tial triple-dam­ages un­der the False Claims Act.

Halifax of­fi­cials al­ways have main­tained that the pay­ments were le­gal and that the con­tracts were vet­ted by ex­pert at­tor­neys. Spokesman John Guthrie said the de­ci­sion to set­tle on the eve of trial af­ter five years of lit­i­ga­tion was mo­ti­vated by fi­nan­cial pres­sures at the tax-sup­ported hospi­tal. The trial was sched­uled to be­gin March 3.

“We be­lieve we have a fidu­ciary re­spon­si­bil­ity to avoid the risks as­so­ci­ated with trial and the po­ten­tial for a lengthy ap­peals process,” Guthrie said in a state­ment.

The $85 mil­lion pay­ment is con­sid­ered the largest set­tle­ment ever un­der the Stark law, al­though ex­perts say a jury ver­dict last year against Tuomey Health­care Sys­tem in Sumter, S.C., that reached $237 mil­lion may even­tu­ally be re­solved through a post-trial set­tle­ment that could eclipse the Halifax to­tal.

The set­tle­ment says hospi­tal of­fi­cials are not ad­mit­ting to any fraud, but they do ac­knowl­edge that a federal judge de­cided on sum­mary judg­ment in a pre-trial mo­tion last fall that the agree­ment with some med­i­cal on­col­o­gists broke a law against pay­ing doc­tors to re­fer pa­tients for treat­ments.

“Pa­tients de­serve to know that (med- ical) rec­om­men­da­tions are based on sound med­i­cal prac­tice, not il­le­gal fi­nan­cial re­la­tion­ships be­tween providers,” HHS In­spec­tor Gen­eral Daniel Levin­son said in a state­ment. Levin­son’s of­fice will be en­forc­ing a fiveyear cor­po­rate in­tegrity agree­ment with Halifax that re­quires the sys­tem to hire a le­gal re­viewer to mon­i­tor all agree­ments with doc­tors, as well as an additional com­pli­ance of­fi­cer.

Levin­son’s of­fice will be en­forc­ing a

five-year cor­po­rate in­tegrity agree­ment

with Halifax Health.

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