The federal fraud settlement agreement that wrapped up a kickback case in South Bend, Ind., last year shows that not all healthcare executives embroiled in kickback scandals face serious criminal penalties.
St. Joseph's Care Group of South Bend found itself in hot water last year when its for-profit physician recruitment subsidiary, Horizon Group Enterprises, pleaded guilty to paying two physicians more than $500,000 in kickbacks in exchange for patient referrals to its hospital.
St. Joseph's Care Group is a subsidiary of Holy Cross Health System and a parent of St. Joseph's Medical Center in South Bend.
Horizon was sentenced to one year of probation and fined $686,000.
The two physicians received prison time for their part in the scheme.
However, none of the hospital or hospital system executives involved suffered any legal penalties, although two resigned during the government's investigation (May 11, 1998, p. 22).
The corporate integrity agreement imposed by the government requires the hospital and its parent to submit annual compliance reports until 2003. These exhaustive reports will detail the providers' written policies and any corrective actions taken against individual employees for violating the agreement.
It also spells out penalties of $1,500 for each day St. Joseph's does not abide by certain provisions, such as having a full-time compliance officer and submitting annual compliance reports to the government.
MODERN HEALTHCARE recently obtained a copy of the corporate integrity agreement through the federal Freedom of Information Act.