Published: Apr 5, 2013
By David Pittman , Washington Correspondent, MedPage Today
Utah’s largest health system will pay more more than $25 million to settle claims that it violated Stark laws that prohibit paying doctors in ways that influence referrals, the Justice Department has announced.
Intermountain Healthcare in Salt Lake City self-disclosed to federal investigators that it may have illegally paid bonuses to 37 physicians from as early as 2002 through sometime in 2009, court documents released Wednesday showed.
“Intermountain, through its Intermountain Medical Group subsidiary, compensated certain employed physicians using a bonus formula that may have improperly taken into account the volume and value of the physicians’ patient referrals to Intermountain,” a settlement agreement filed in federal court stated.
The nonprofit health system with 22 hospitals and 800 physicians also rented office space to 18 doctors in Burley, Idaho and Richfield, Utah “where there may have been fair market-value issues with the leases,” the settlement stated. Some were provided the space as early as 1997 and the leases spanned a 15-year time frame.
Lastly, the health system had “compensation or other financial arrangements” with another 154 physicians outside the scope of their contract.
Intermountain reported the issues to the Department of Health and Human Services and Justice Department in August 2009, according to the settlement. The health system will pay $25.5 million to settle the matter.
“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,” Brent Wallace, MD, Intermountain Healthcare chief medical officer, said in a press release issued Wednesday. “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.”
Wallace said individual doctors listed in the settlement may not have committed any wrongdoing. The settlement was not a admission of wrongdoing, the court documents stated.
“The Department of Justice has longstanding concerns about improper financial relationships between healthcare providers and their referral sources, because such relationships can corrupt a physician’s judgment about the patient’s true healthcare needs,” Stuart Delery, acting assistant attorney general, said in a statement. “In addition to yielding a recovery for taxpayers, this settlement should deter similar conduct in the future and help make healthcare more affordable for patients.”