Cal­i­for­nia hos­pi­tal pays $3.2 mil­lion over po­ten­tial Stark vi­o­la­tions

Modern Healthcare - - REGIONAL NEWS - —Lisa Schencker

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.

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