“As hospitals are employing more and more physicians, this settlement draws focus to how hospitals are compensating their physicians,” said healthcare attorney Brian Roark of Bass Berry & Sims in Nashville.
All told, the alleged violations involved 209 physicians. System officials noted that the appearance of the physicians' names in the settlement should not be taken to suggest they committed any wrongdoing.
The disclosures triggered potential False Claims Act liability leading to the $25.5 million settlement (PDF)—one of the larger recent hospital settlements with the Justice Department.
Intermountain Chief Medical Officer Dr. Brent Wallace said in a statement that the system uncovered the issues through its “regular review process,” and that it reported them to the government in 2009. “Intermountain's management recognized that potential penalties could be significant, but at no time was there ever any consideration given to not self-disclosing the issues,” Wallace said. Intermountain did not admit wrongdoing in the settlement agreement.
The system characterized the violations as “technical in nature” and said they arose partly because of the 300 pages of federal regulations and commentary that govern financial relationships between hospitals and physicians.
“Intermountain should have monitored this situation more closely. We are embarrassed that these issues occurred and regret that our controls at the time were inadequate to properly monitor these matters,” Wallace said in the statement.
Roark said self-disclosed allegations like Intermountain's and a similar $9.3 million settlement paid by Freeman Health System, Joplin, Mo., last November show that complying with complex Stark regulations can indeed be difficult.
“Trying to make sure that you are complying with 300 pages of statutes and regulations can be a challenge,” Roark said.
Intermountain officials say they have a reputation for the quality and efficiency of their care. In 1996 the system became the third healthcare provider ever to win the National Quality Healthcare Award from the National Quality Forum.
President Barack Obama name-checked Intermountain in a 2009 speech: “We have to ask why places like … Intermountain Health in Salt Lake City … can offer high-quality care at costs well below average, but other places in America can't. We need to identify the best practices across the country, learn from the success, and replicate that success elsewhere.”
