California hospital pays $3.2 million over potential Stark violations
A California hospital has agreed to pay $3.28 million to settle allegations that nearly 100 of its payment arrange- ments with doctors and physicians groups broke federal law.
Tri-City Medical Center in Oceanside, Calif., self-reported the potential violations of the Stark law and False Claims Act in 2011.
The Stark law prohibits doctors from referring Medicare patients to hospitals, labs and other doctors that the physicians have financial relationships with unless they fall under certain exceptions. Those exceptions require that the financial arrangements between hospitals and doctors be commercially reasonable and not take into account the number of a doctor’s referrals to the hospital.
Five arrangements with the hospital’s former chief of staff may not have been commercially reasonable or for fair market value. Another 92 financial arrangements with community-based physicians and practice groups allegedly included technical violations. In those cases, the written agreements were allegedly expired, missing signatures or couldn’t be found, among other things.
The Tri-City executives who oversaw the contracts in 2009 are no longer affiliated with the hospital, and all of its current contracts are in compliance with the law, according to a hospital statement.
“It is unfortunate to have inherited this long-standing legal issue, but we are pleased to have brought it to a successful conclusion,” CEO Tim Moran said in the statement about the settlement with the U.S. Justice Department.
In recent months, a number of hospitals systems have entered into large settlements with the government over alleged violations of the Stark law and False Claims Act.