This report originally appeared in the February 2010 issue of DOTmed Business News
The U.S. Department of Justice (DOJ) has announced that the St. John Health System of Tulsa, OK, has agreed to a settlement with the United States of False Claims Act violations. Under the settlement, St. John will pay the United States $13,229,348. In addition, Wheaton Community Hospital, the City of Wheaton, MN, and Dr. Stanley Gallagher have agreed to pay $846,461 to settle allegations that their hospital admission practices violated the False Claims Act.
According to the DOJ, St. John allegedly submitted claims to Medicare and Medicaid that were problematic due to the hospital's financial relationships with referring physicians. Federal law prohibits health care providers from billing federal health care programs for physician referrals when the provider has a financial relationship with the physician. The DOJ says that St. John made payments to 23 individual physicians or physician groups for medical service referrals. St. John had submitted a self-disclosure report to the Department of Health and Human Service's Office of Inspector General in 2008, in which St John acknowledged that the physician agreements may have been improper.
The settlement agreement in the Wheaton case alleges that from 1998 to 2004, Gallagher admitted certain Medicare beneficiaries to the hospital for inpatient care without medical necessity. Gallagher also appropriately admitted other Medicare beneficiaries to the hospital, but kept those patients hospitalized for an unnecessarily long period of time. The defendants then billed Medicare for the cost of these hospital admissions. The agreement is neither an admission of liability by the defendants nor a concession by the United States that its claims are not well founded.
