Two Montana hospitals to pay $3.9M for violating Stark Law, False Claims Act

Two Montana hospitals have agreed to pay $3.95 million to settle allegations that they paid incentives to doctors for patient referrals, then received Medicare reimbursements for those payments, federal prosecutors said Wednesday.

Billings, Mont.-based St. Vincent Healthcare and Miles City-based hospital Holy Rosary Healthcare agreed to the settlement, acknowledging they violated the Stark Law and the False Claims Act, the the U.S. Department of Justice announced yesterday.

"The resolution of this matter underscores our commitment to ensure that services reimbursable by federal health care programs are based on the best interests of patients rather than the personal financial interests of referring physicians," said Stuart F. Delery, acting assistant attorney general for the DOJ Civil Division, in the announcement.

St. Vincent Healthcare CEO Jason Barker said the hospitals disclosed the violation after an internal compliance review and have been cooperative, the Billings Gazette reported.

"It is important to note that patient care was not compromised by our physician contracting arrangements," Barker said in a statement to the Billings Gazette. "Further, no patient or governmental entity was billed for any service that was not provided and the contracting issues did not result in overutilization of these services."

Barker said the hospitals are "committed to complying with all health care laws" and avoiding similar problems in the future. The newspaper reports that Justice Department and hospital officials wouldn't divulge further details of how the incentive pay program worked.

To learn more:
- read the DOJ announcement
- read the Billings Gazette article

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