Intermountain Healthcare pays $25.5M to end investigation

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SALT LAKE CITY – Utah’s largest health system self-disclosed violations of federal health care laws and agreed to pay the United States $25.5 million to settle its claims, according to a statement from the United States Department of Justice.

“These issues were primarily technical in nature and involved things such as lack of proper paperwork involving leases of physician offices and service agreements,” said a statement on Intermountain Healthcare’s website.

The DOJ statement said Intermountain Healthcare admitted to violating the Stark Statute by employment agreements under which the physicians received bonuses that improperly took into account the value of some of their patient referrals; and office leases and compensation arrangements between Intermountain and referring physicians that violated other requirements of the Stark Statute. These issues were disclosed to the government by Intermountain Healthcare.

“People should expect that hospitals and doctors care more for their patients than their bottom line profits,” said Gerald Roy, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services region including Utah. “So I applaud Intermountain for recognizing their liability and coming forward to self-disclose these violations.  We will vigilantly protect taxpayer-funded health programs against Stark violations through tight coordination with our partners at the Department of Justice.”

Read the entire statement from Intermountain Healthcare:

Intermountain self-reports concerns to federal government

Intermountain Healthcare has reached a settlement agreement with the federal government, fully resolving issues Intermountain previously self-disclosed in 2009

​​Statement issued by Brent Wallace, MD, Intermountain Healthcare Chief Medical Officer:

Intermountain Healthcare has reached a settlement agreement with the federal government that fully resolves issues Intermountain had previously self-disclosed in 2009 involving certain leases and contracts with some physicians.

Under the settlement agreement, Intermountain will pay the federal government $25.5 million.

Through its regular review processes, Intermountain discovered some issues where it might be out of compliance with the complex federal Stark Law and regulations regarding physician relationships, and promptly and voluntarily disclosed them to the U.S. Attorney for Utah for review. 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.

These issues were primarily technical in nature and involved things such as lack of proper paperwork involving leases of physician offices and service agreements. That individual physicians are listed in the attachments to the agreement does not mean that a physician committed any wrongdoing of any kind. These issues were self-disclosed in 2009 and have been corrected.

None of these issues adversely affected in any way the quality, appropriateness, or cost of patient care at Intermountain hospitals and clinics. In fact, Intermountain has consistently been featured in national studies and media reports for both its high quality and cost-effective care. For example, a Dartmouth study found that if all hospitals provided care like Intermountain facilities, the nation would see about a 40 percent reduction in costs.

The issues arose in part due to the complexity of nearly 300 pages of federal regulations and commentary governing relationships between hospitals and physicians that have evolved and changed over time and were modified in 2007. 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.

Since discovering these concerns Intermountain has improved its controls by implementing a rigorous centralized process to track all physician agreements. Intermountain added additional staff, implemented advanced tracking software, created oversight councils, and put additional training in place to assure compliance with all relevant regulations. Intermountain will continue the practice of regularly evaluating and monitoring all business practices to ensure legal and regulatory compliance. We have learned from this experience and are a better company as a result.

Read the entire statement from United States Department of Justice:

INTERMOUNTAIN HEALTH CARE INC. PAYS U.S. $25.5 MILLION TO SETTLE FALSE CLAIMS ACT ALLEGATIONS
WASHINGTON – Intermountain Health Care Inc. has agreed to pay the United States $25.5 million to settle claims that it violated the Stark Statute and the False Claims Act by engaging in improper financial relationships with referring physicians, the Justice Department announced today.  Intermountain operates the largest health system in the state of Utah.

            The Stark Statute restricts the financial relationships that hospitals may have with doctors who refer patients to them.  The relationships at issue in this matter that the United States alleged were prohibited by the Stark Statute included employment agreements under which the physicians received bonuses that improperly took into account the value of some of their patient referrals; and office leases and compensation arrangements between Intermountain and referring physicians that violated other requirements of the Stark Statute. These issues were disclosed to the government by Intermountain.

            “The Department of Justice has longstanding concerns about improper financial relationships between health care providers and their referral sources, because such relationships can corrupt a physician’s judgment about the patient’s true healthcare needs,” said Stuart F. Delery, Acting Assistant Attorney General for the Department’s Civil Division.  “In addition to yielding a recovery for taxpayers, this settlement should deter similar conduct in the future and help make health care more affordable for patients.”

            “People should expect that hospitals and doctors care more for their patients than their bottom line profits,” said Gerald Roy, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services region including Utah. “So I applaud Intermountain for recognizing their liability and coming forward to self-disclose these violations.  We will vigilantly protect taxpayer-funded health programs against Stark violations through tight coordination with our partners at the Department of Justice.”

This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $10.2 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $14.2 billion.

            The case was handled by the Justice Department’s Civil Division, the United States Attorney’s Office for the District of Utah, the Office of Inspector General of the Department of Health and Human Services and the Centers for Medicare and Medicaid Services. The claims settled by this agreement are allegations only, and there has been no determination of liability.

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