An investigation into the referral patterns of a physician-owned rehabilitation hospital in Indiana has scuttled the parent companys plans to buy a hospital from LifePoint Hospitals.
Fraud investigation scraps deal
CEO, partners under suspicion of improper referrals
In April, federal and state agents raided Doctors Hospital and Neuromedical Center in Bremen, Ind.; homes and offices of Cameron Gilbert, president and CEO of parent company Physicians Hospital System; and spine surgeon Jamie Gottlieb, one of Physicians Hospitals 83 physician investors. They also visited Gottliebs I-Spine Institute in Elkhart, Ind. None of the parties has been accused of any wrongdoing.
Physicians Hospital System, Mishawaka, Ind., was close to completing a deal to buy LifePoints 49-bed Starke Memorial Hospital in Knox, Ind., which required the approval of the Starke County Board of Commissioners because the county owns the property and equipment. The commissioners met five days after the raids brought the investigation to light and voted to table the decision for a month, agreeing too little was known about what the government was looking for. Clarian Health, Indianapolis, had been onboard as a 30% partner. I believe the county commissioners and the county council acted very appropriately, Gilbert said. We are very confident that information that was provided by other people to the investigators will be proven faulty, hopefully sooner rather than later. These commissioners were sitting there at an incredible disadvantage.
A spokeswoman for the U.S. attorney in northern Indiana said the office does not discuss active investigations and refused to confirm details the office reportedly disclosed to the local media. It relates to healthcare billing fraud, improper referrals of patients and suspected illegal kickbacks to doctors, Assistant U.S. Attorney Donald Schmid was quoted as telling the South Bend (Ind.) Tribune the day of the raids.
It was very embarrassing, Gilbert said, and he explained his understanding of the matter this way: Others have provided information to investigators that we had inappropriate admissions into our hospital and that physicians were being incentivized to put patients into the hospital. Both are incredibly false allegations.
The agreement with LifePoint expired at the end of April, and LifePoint declined to extend it, Gilbert said. LifePoint spokeswoman Diane Huggins confirmed that LifePoint is exploring other options for selling Starke Memorial.
Gilbert, who was Starke Memorials CEO from 2000 to 2003, said he intends to put together a new offer. Were trying to do the absolute best we can for that community, he said.
Physicians Hospital System also includes RiverCrest Specialty Hospital, a long-term acute-care hospital in Mishawaka, where the company plans to open a medical-surgical hospital later this year.
Gottlieb did not return a call seeking comment.
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