Mercy Health hit with $14 million settlement over alleged improper financial physician payments
The settlement resolves allegations that Mercy Health paid six employed physicians above and beyond fair market value for their services.
Mercy Health - St. Vincent Medical Center. Credit: Google Street View
Mercy Health, a Cincinnati-based nonprofit healthcare system that operates facilities in Ohio and Kentucky, has settled with the government for $14,250,000 over allegations it maintained improper financial relationships with referring physicians, the Justice Department has announced.
The settlement resolved allegations that Mercy Health paid six employed physicians, including an oncologist and five internal medicine physicians, above and beyond fair market value for their services. Federal law restricts the financial relationships that hospitals may have with doctors who refer patients to them. Mercy Health disclosed the misstep to the government, according to the DOJ.
"When physicians are rewarded financially for referring patients to hospitals or other healthcare providers, it can affect their medical judgment, resulting in overutilization of services and higher health care costs," said Acting Assistant Attorney Chad A. Readler, who heads up the Justice Department's Civil Division.
There has been no actual determination of liability in this case.
"During an internal audit, Mercy Health learned that it made errors in the administration of a small number of physician arrangements. Mercy Health promptly disclosed the administrative errors to the federal government, with which it cooperated fully, and is pleased to have resolved the matter," Mercy Health said in a statement.
Mercy Health was in the news earlier this year after announcing plans to merge with Bon Secours Health System. The Catholic systems will combine Bon Secours East Coast market and Mercy Health's Ohio and Kentucky market, yielding the fifth largest Catholic health system with $8 billion in net operating revenue serving 10 million patients across seven states.
The new system would include 43 hospitals, home health agencies and hospice agencies, skilled nursing and assisted living facilities and other care sites.
