CoxHealth, Springfield, Mo., has agreed to pay $60 million to resolve allegations involving financial relationships with referring physicians and Medicare billing practices, the Justice Department announced.
The settlement calls for an initial payment of $35 million and then five subsequent payments of $5 million a year, as well as a five-year corporate integrity agreement with the HHS inspect generals office. The figures and timetable were disclosed to bondholders in a Feb. 27 letter anticipating the settlement.
In almost every instance of what is included in the settlement, the issues were identified by hospital administration and the results of our review were reported to the government, President and Chief Executive Officer Robert Bezanson said in a statement included on a Web page created to explain the settlement and background. The system has been reserving funds in preparation for the settlement and also will draw on its long-term reserves to make the first payment, the system said.
The Justice Department concluded that CoxHealth violated the False Claims Act, anti-kickback statute and Stark restrictions on physician self-referral between 1996 and 2005. In the settlement, CoxHealth denies the governments contentions. The system attributes the allegations to differing interpretations of highly technical federal regulations governing billing and medical-director agreements for its Ozarks Dialysis Services, as well as rules involving the revenue source used to compensate a physicians group that staffs the CoxHealth-owned Ferrell-Duncan Clinic. -- by Gregg Blesch