Halifax Health agrees to internal monitoring as part of landmark settlement
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.