Adventist Health to pay $14.1M to settle kickback allegations

Roseville, Calif.-based Adventist Health and its affiliated White Memorial Medical Center have agreed to pay the United States and the state of California $14.1 million to settle claims that they violated the False Claims Act, the U.S. Department of Justice announced Friday.

The settlement resolves allegations that the hospital compensated physicians who had referred patients to the White Memorial facility by transferring assets, which included supplies and inventory, at unfair, less-than-market value, according to the announcement. White Memorial also paid referring physicians at a rate above fair market value for teaching services at its residency program, the DOJ contends, violating the Anti-Kickback Act and Stark Statute, and by extension violating the False Claims Act.

According to the DOJ, about $11.5 million of the settlement will be paid to the U.S. Government, most going to the Medicare Trust Fund, and the remaining $2.6 million will be paid to California's Department of Health Care Services.      

"The settlement announced today underscores one of the key purposes of the Stark and Anti-Kickback laws--to ensure that the judgment exercised by health care providers is based on legitimate patient needs and is not influenced by illegal payments," said Benjamin B. Wagner, U.S. Attorney for the Eastern District of California, in the announcement.

White Memorial has contended it cooperated with the government investigation and that the financial relationships scrutinized took place "more than a decade ago," the Los Angeles Times reports. "We settled this matter to avoid a lengthy litigation process which would have taken our focus away from serving our community," hospital spokeswoman Alicia Gonzalez told the LA Times.

Adventist Health's agreement follows a similar resolution last week, in which two Montana hospitals agreed to pay $3.95 million to settle allegations that they paid incentives to doctors for patient referrals and then received Medicare reimbursements for those payments, violating the Stark Law and the False Claims Act.

To learn more:
- read the DOJ announcement
- read the Los Angeles Times article

Related Articles:
Two Montana hospitals to pay $3.9M for violating Stark Law, False Claims Act
Why the Stark Law loophole must go
Imaging self-referrals cost Medicare an extra $109 million
Intermountain to pay $25.5M settlement over improper doc relationships
How to self-disclose Stark, kickback violations

Suggested Articles

The profit margins and management of Community Health Group raise questions about oversight of managed care insurers.

Financial experts are warning practices about the pitfalls of promoting medical credit cards to their patients.

A proposed rule issued by HHS on Tuesday would expand short-term coverage, a move Seema Verma said will have "virtually no impact" on ACA premiums.