HCA agrees to pay $16.5M to settle false claims allegations
Hospital Corporation of America (HCA) Inc., the parent company of Parkridge Medical Center in Chattanooga, Tenn., and Nashville, Tenn.-based HCA Physician Services, has agreed to pay the U.S. Department of Justice $16.5 million to settle claims that it violated the False Claims Act and the Stark Statute in 2007.
As announced last week by the DOJ, the two organizations allegedly provided financial benefits to the Diagnostic Associates of Chattanooga to encourage its doctors to refer patients to the HCA facilties.
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According to the DOJ, the financial transactions included rental payments for office space leased from Diagnostic at a rate in excess of fair market value in order to assist Diagnostic members to meet their mortgage obligations and a release of Diagnostic members from a separate lease obligation.
The Stark Statute restricts financial relationships that hospitals may enter into with physicians who potentially may refer patients to them. Federal law prohibits the payment of medical claims that result from such prohibited relationships.
"Improper business deals between hospitals and physicians jeopardize both patient care and federal program dollars," Daniel R. Levinson, the U.S. Department of Health and Human Services' Inspector General, said in a press release. "Our investigators continue to work shoulder to shoulder with other law enforcement authorities to stop schemes that imperil scarce healthcare resources."
As part of the settlement, Parkridge Medical Center also has agreed to a five-year corporate integrity agreement with the U.S. Department of Health and Human Services' Inspector General to ensure its continued compliance with federal healthcare benefit program requirements. However, Parkkridge admitted no intentional wrongdoing in any part of the settlement.
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The settlement stems from a 2008 whistleblower case, in which the whistleblower will receive 18.5 percent ($3.1 million) of the recovery. HCA is also required to pay $236,000 to cover the whistleblower's legal fees.
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