by Ben Vernia | January 7th, 2014
On December 31, the Department of Justice announced that it had reached a settlement with a Montana hospital and its Colorado-based parent, resolving issues the companies self-disclosed concerning payments to health care providers for referring patients. According to DOJ’s press release:
St. James Healthcare (St. James), a hospital located in Butte, Mont., and its parent company, Sisters of Charity of Leavenworth Health System (Sisters of Charity), a health care organization based in Denver, Colo., have agreed to pay $3.85 million to resolve allegations that they violated the Anti-Kickback Statute, the Stark Law and the False Claims Act by improperly providing financial benefits to physicians and physician groups that made referrals to the hospital, the Justice Department announced today.
The Anti-Kickback Statute prohibits the provision of remuneration with the intent to induce referrals of government health care program business. The Stark Law restricts financial relationships that hospitals may enter into with physicians who refer patients to them. Federal law prohibits payment by federal health care programs of medical claims that result from arrangements that violate the Anti-Kickback Statute or the Stark Law.
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The settlement announced today resolves allegations that St. James and Sisters of Charity provided various improper financial incentives to physicians and physician groups that were involved in a joint venture with St. James to own and operate a medical office building on the St. James campus. These incentives included a payment to the joint venture that increased the share values for the physicians and physician groups in the joint venture and resulted in below fair market value lease rates for the physicians renting space in the medical office building. Additional incentives provided by St. James and Sisters of Charity included below fair market value lease rates for the land upon which the medical office building was constructed and other below fair market value arrangements related to shared facilities, use and maintenance. These issues were disclosed by St. James and Sisters of Charity to the government.
