Nearly four years after a federal raid on its facilities turned Woods Memorial Hospital District, Etowah, Tenn., into a symbol of hospitals' alleged victimization by government fraud enforcers, the district has settled with the government. Without admitting wrongdoing, the district agreed to pay $1.2 million to resolve allegations of cost-reporting fraud, upcoding, false claims and illegal cost shifting. It also signed a five-year corporate integrity agreement. In February 1999, 37 federal agents, some armed and dressed in flak jackets, descended on four Woods Memorial sites to retrieve billing documents and medical records. Hospital groups called the agents "jack-booted thugs," and the American Hospital Association used the raid during its unsuccessful lobbying for less aggressive enforcement. "People were surprised by the aggressive nature of the agents, who just about shut the hospital down for two or three days," said Woods Memorial CEO David Southerland, who joined the district in September 2001. Southerland said he is pleased to have the matter behind the hospital. Woods Memorial lost $48,000 in fiscal 2002, after a $3.3 million loss the year before, and should turn a slight profit in fiscal 2003, he said. -- by Mark Taylor
Subject of infamous raid settles
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