Regional News/West: Adventist to pay $14 million over allegations it improperly compensated physicians, and other news

LOS ANGELES—Roseville, Calif.-based Adventist Health agreed to pay $14.1 million to resolve allegations that it improperly compensated physicians who referred patients to the system's White Memorial Hospital in Los Angeles. White Memorial also agreed to enter a five-year corporate integrity agreement with HHS' inspector general's office, the U.S. Justice Department said in a news release. The hospital, the government alleged, transferred medical supplies and other goods to physicians for less than fair-market value and paid physicians inflated rates for teaching services in its family-practice residency program. “We are pleased the matter is concluded, and we will diligently fulfill the terms of the corporate integrity agreement,” Adventist Health said in a written statement. The statement noted that the system cooperated with the investigation and that the allegations involve financial relationships “with several doctors that were entered into more than a decade ago.” The settlement stems from a whistle-blower lawsuit filed in 2008 by two doctors, according to a release issued by the law firms that represented them, Phillips & Cohen and Hirst Law Group.

SACRAMENTO, Calif.—A California law that created an agency to oversee national healthcare reforms granted it sweeping authority to conceal spending on the contractors that will perform most of its functions, creating a barrier from public disclosure that stands out nationwide. The degree of secrecy afforded Covered California appears unique among states attempting to establish their own health insurance exchanges under President Barack Obama's signature health law. An Associated Press review of the 16 other states that have opted for state-run marketplaces shows the California agency was given powers that are the most restrictive in what information is required to be made public. In Massachusetts, the state that served as the model for Obama's healthcare overhaul, its Health Connector program is specifically covered by open-records laws, rather than providing exemptions from them, as is the case for contracting in California. In Idaho and in New Mexico, agencies specifically must comply with open-records laws. The Maryland Legislature subjected its exchange to the state's public information act, but protected some types of commercial and financial information. In California's case, the exclusions may run afoul of the state constitution, one legal expert said. Exchange spokesman Dana Howard said the agency complies with the law but declined to discuss in detail how it determines what is public and what is not. In setting up the California exchange, lawmakers gave it the authority to keep all contracts private for a year and the amounts paid secret indefinitely. According to agency documents, Covered California plans to spend nearly $458 million on outside vendors by the end of 2014, covering lawyers, consultants, public relations advisers and other functions.

—Associated Press