“We had taken an internal review of our processes and systems up there, and that's when we disclosed this,” said Cheston Turbyfill, director of public affairs for Sisters of Charity of Leavenworth Health System, which has corporate offices in Denver.
The written settlement with the Justice Department (PDF) says the hospitals “do not contest” Stark law liability, but the agreement was not an admission of wrong-doing under the False Claims Act, which is an anti-fraud statute.
The internal reviews turned up the names of 86 doctors employed directly by the hospitals who were paid in part on the basis of how much Medicare revenue they generated for the hospital between 2003 and 2010, which is prohibited by the Stark law.
“There are limitations to how the compensation can be paid to physicians,” said Scott Taebel, a Milwaukee attorney for Hall Render who was not involved in the case. “Even though they work for the hospitals, the compensation can't be tied to the volume or value of those referrals.”
In addition, the hospitals' audits turned up 53 financial arrangements with independent physician groups that potentially violated the Stark law by compensating them for referring patients to the hospitals, a statement from the Justice Department said.
“It is important to note that patient care was not compromised by our physician contracting arrangements,” Jason Barker, St. Vincent Healthcare president and CEO, said in an e-mailed statement. “Further, no patient or governmental entity was billed for any service that was not provided and the contracting issues did not result in overutilization of these services.”
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