A major Roman Catholic hospital in Kansas City, Mo., has restated six years of Medicare cost reports to account for improper expenses its former chief executive officer claimed.
Saint Joseph Health Center, a 267-bed tertiary-care hospital owned by Carondelet Health System, has agreed to pay $172,228 to the federal government.
That figure is derived from $91,000 in actual unallowable costs that Medicare reimbursed from July 1, 1992, through June 30, 1997. The settlement equals roughly double the damages the system would have faced had the case been adjudicated.
Carondelet voluntarily approached the U.S. attorney's office in Kansas City after it fired President and CEO Richard "Mike" Abell on Oct. 6, 1998. Abell was terminated "following a review of his personal expense accounts," the hospital's board said in a written statement at the time (Oct. 12, 1998, p. 14).
A settlement agreement dated Sept. 21, 1999, between Carondelet and the U.S. attorney's office said the unallowable costs included "either civic expenses or the personal expenses of corporate officer(s), such as liquor or clothing, or alleged charitable contributions, some of which were reported as costs to the United States but not actually paid to the charity."
In an interview earlier this month Gary Christiansen, president and CEO of St. Louis-based Carondelet, said the agreement stemmed from "misappropriation of funds by the CEO." At that time, he declined to disclose the amount of the settlement but described it as "very favorable" for the hospital. He also declined to state the amount that was misappropriated, which would have been more than what was claimed on the Medicare reports.
A spokesman for the U.S. attorney's office said no complaint was filed with the U.S. District Court in Kansas City. The settlement between Carondelet and the government "is the only document that has been executed. It was never filed with the court. It is a binding document on both sides."
The 14-page settlement releases Carondelet from any further litigation under the False Claims Act or other fraud statutes. It does not preclude further civil, administrative or criminal claims against individuals.
Christiansen said, "They did not impose a corporate integrity program for us, which typically in these kinds of situations, we've been told, becomes a mandatory thing.
"The fact that we voluntarily came to them and showed the program we had in place, they were very supportive and accepted our program," he said.
Carondelet received payment from its insurance carrier to cover its expenses in the matter. The insurer would be responsible for recovering those costs from Abell, Christiansen said.
When last contacted by MODERN HEALTHCARE, Abell, 60, said he was retired and raising funds for the YMCA in metropolitan Kansas City (June 7, p. 22).